Critical Test Of Channel Week Of July 12 2010

Stocks have had one of the best up weeks that they have had in almost a year.

Short terms traders that listened to last weekends FTV video with any luck were able to take advantage of the upswing. Nevertheless if you are a long term trader then you did not care to buy last week for the reason that we are still in the boundaries of a downtrend channel. That suggests that you have lower swing highs and lower swing lows.

It is very precarious for any trader to try and buck the trend. The trend is your friend. Stay in the right channel. We are in a down channel so you must be more bearish than bullish. If we were in an uptrend channel you would want to be more bullish than bearish.

My fellow stock trading fighters, we are at significant moment going into next week as we roll into earnings season. Everybody is going to be listening to what these earning reports are telling us.

What we have on the technical analysis of the S&P 500 is we are at a vital resistance level if you sketch the upper downtrend channel line touching the June 21 2010 high.

The significant resistance zone to watch on the S&P 500 daily chart is 1080 to 1093 on the S&P 500.

The important resistance zone to keep in mind on the S&P 500 weekly chart is 1100.

The vital support level to keep your eyes on on the S&P 500 is 1050. If we plummet back below 1050, investors who are short this market will make a killing.

In summary we have a lot of resistance areas coming up that bulls are going to have to smash through.

What I think is going to happen as proof by the falling volume over the last week is that we might get up to this resistance zone and then swing back down. On the other hand, this downtrend channel has had 3 swings up and down now so the life cycle of this trend channel is coming to an end. If the trend was going to reverse, now would be the time to do it.

Technically speaking, as we are still within a downtrend there is a greater possibility of us dipping than there is busting through this upper trend channel resistance.

Below is this new technical analysis video from FTV.

U.S. economic news coming next week:

Jul 14 08:30 Retail Sales Jun
Jul 15 08:30 Initial Claims 07/10
Jul 15 08:30 Continuing Claims 07/03
Jul 15 08:30 PPI Jun
Jul 15 08:30 Core PPI Jun
Jul 15 08:30 NY Fed - Empire Manufacturing Index July
Jul 15 09:15 Industrial Production Jun
Jul 15 10:00 Philadelphia Fed Jul
Jul 16 08:30 Core CPI Jun
Jul 16 08:30 CPI Jun
Jul 16 09:55 Mich Sentiment Jul