SPX Daily Chart - 31 March 2011

     After coming very near our next target level of 1332.28 on Wednesday, the market hesitated yesterday as it formed what it known as an 'inside' day. At the same time it completed a TD Sell Setup. Decision time!
     To get an early indication of which way we go from here I will be observing the price action with regard to two 'lines'. The question is which one will the market break first (in a qualified manner): the 1332.28 resistance level (horizontal dashed line on the chart) or the demand line (upsloping dashed green line)? A qualified break of the former says we next challenge 1345.5. A qualified break of the latter says the run up from March 16 is likely over.
     Another point of interest that I will be watching on all the charts to come (new Quarterly, Monthly, and Weekly to be presented starting Monday): What is the RSI indicator saying in its role as a trend indicator? On the daily chart it said a bear market began at the mid-February high. In fact, the current rally sees the RSI still below the area reserved for resistence in bear markets (shown by the parallel red horizontal lines).
     Bottom Line: The daily chart remains in a bearish mode with allocation mix at a +50% reading. The chart would turn bullish with a qualified break of 1345.5.