Finally Bulls show some Power - Trading Week Update

Today, after more than a month where the S&P 500 wasn't able to get past the 4,732 resistance line, finally it was able to close above it. Today was the fourth straight day where the S&P rallied. The scenario is encouraging if you are trading on the long side.

The 39-min chart shows the last 30 days of trading. Reviewing what happened on Nov/22 and Dec/16 (red circles in the screenshot below, you can click the image in order to zoom in) after the S&P tested the 4,732 resistance line it collapsed. Today things were different, the rally was powerful, in fact, if you review the last four days of trading in the chart below, each of those four days the S&P has been closing at its highs without significant intraday pullbacks.

Click the image in order to magnify it

The weekly chart shows that the trend is intact (screenshot below) and in the next few days we will be able to see if the S&P can continue its way up.

The numbers on the Monthly New Lows and Highs also improved (columns G and H in the screenshot below). The selling pressure is gone for now and the S&P is in uncharted territory closing at a historic high.

Risks

Unfortunately, in the Markets chaos and uncertainty are part of the game. Despite the rally, the bad news that made the index tumble in past days are just getting worse. In terms of the virus, the number of cases around the world keep increasing with the risk of lockdowns and therefore a potential slowdown in the economic recovery. The global supply chain crisis isn't solved yet. Inflation in the USA is still a risk factor in the economy. Tensions between US and China / Russia have been around for months. I don't trade news but all those situations have been Market catalysts recently.

Additionally the 4,732 is likely to be tested. If the S&P can't keep above that line and the New Monthly Lows start to increase, the selling pressure will be back and the line could be broken.

My portfolio currently has eight positions open, all of them on the long side, half of them in Real State. If any of the stocks that I'm tracking triggers an alert, I'll evaluate if I can open new long positions. I'm still trying to buy CF, but my entry is around 70.59 so right now it's not an option. I have been looking for attractive shorts but I haven't found any yet.