S&P 500 Index (SP500)

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Key Reversals Take Place On Friday
By Tom Bowley

* May 9, 2016

Current Outlook

Technically, it would appear that the bulls are now in charge after Friday's reversal off key moving averages and the solid closing action. The SPY, which tracks the S&P 500, printed a bullish engulfing candle on Friday exactly at its 50 day SMA and close to recent price support as well. The 50 day SMA was to be expected after the recent negative divergence coincided with mid-April price highs. Check out the chart:



Many times, negative divergences signal short- to intermediate-term tops and we see selling down to test rising 50 day SMAs. From there, the market tells us its future plans. Holding on to support close to 204 now seems critical after printing the reversing bullish engulfing candle on Friday. We'll see.

http://stockcharts.com/articles/tradingplaces/2016/05/key-reversals-take-place-on-friday.html

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