S&P500 In Recovery Phase

S&P500 moved back above its 50 day moving average thanks to market strength for the past few days. Initial US jobless claims that were less than expected drove market higher. However there are a number of downside risks and the economy remains fragile at this stage. There seems to be a lack of business, consumer and investor confidence that is needed to push the market higher. Credit growth in the US is still declining and that is limiting economic growth.

The phase chart has endured a bearish attack with the index now in “Recover” phase. The next resistance is at the 200 day moving average at 1115. The index does not seem to have enough momentum to clear its 200 day moving average. The market is likely to trade within range of 1020 and 1120 for the time being