Traders,

The S&P 500 peaked on February 2^nd at $4,195.44 and has been trekking lower ever since in search of support. We’ve no shortage of bounce attempts, but each has proven feeble. Indeed, the declining 9-EMA has proven stiff resistance. What we need is a change in character, a rally that sticks and ends the reign of the oppressive 9-day EMA.

Thursday has a chance to be the beginning. We carved out a bullish engulfing candle at a known previous support zone – the 200-day moving average and the low of February 24^th’s trading session. Remember, a bullish engulfing candle is one where we open lower than the previous candle’s body and proceed to climb and close above the top side of the body.

Now, follow-through is required. After all, holding support is good. But breaking resistance is better.

As we enter the last session of the week, let’s see if bulls can muster a strong close and propel prices above the 9 EMA.  

Be sure to catch this week’s Options Theory blog if you want to learn the ins and outs of butterfly strategies.

Chart of the Day: S&P 500 (SPX)

A pretty classic Bullish Engulfing Candle occurred on Thursday.

Today’s line up

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