In our discussions of the S&P 500I:GSPC over the last few weeks, we have been saying that if this bellwether index's level can hold above 2030, the uptrend will remain intact and stocks should push higher.
We can see that the S&P 500 did continue higher last week and pushed up through resistance at 2070-2080 on what was very strong buying activity. This week, we see support at 2070-2080 area. For traders looking to jump aboard the current swing higher, you can watch for short-term pullbacks into that support area. We see the potential for the index to push up into 2130 area.
Despite the aggressive recovery to the upside in crude oil in recent months, the long-term downtrend cannot be ignored. We now find price approaching some major key long-term levels around $50 to $51, and then around $55. Traders should watch out for a major "blow off" (exhaustion) in prices and look for a bearish reversal signal at some point in the coming days or weeks. Any such opportunity could produce a $3 to $5 move lower as prices reverse off these major levels and take a breather. We would also look at being a buyer at some point, but the nearest support level worth considering for going long crude oil is at $42.50 and isn't relevant right now.
Although gold has gone through a downward retrace in recent weeks, the longer-term trend is still up. Therefore, we want to look to trade in line with that. From a technical view, gold is approaching a key area of support down between the $1,200 an ounce and $1,190 an ounce. The price could see a strong bounce higher from there, and traders can watch that support area closely for buying opportunities in the coming days.
Copyright 2016 LearnToTradeTheMarket
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage. At the time of publication, the author held no positions in the stocks mentioned.