Thursday, August 2, 2007

TSX and S&P 500 Hold Critical Support

The TSX had a rough day yesterday, and dropped all the way to major support, but the good news is that no major support was broken. This means that the TSX must not fall today in order for me to remain optimistic. Here is an update of the TSX chart.

It seems to me that I was not the only investor looking at this level of support. Notice how the key level was penetrated intraday, but actually held by the time the market closed.

I don't normally look at the next chart all that much, but I feel that, yesterday, something rather significant occurred. The next chart is a daily chart of the S&P 500 ETF. Notice how the bears pushed prices beneath the 200 day moving average, but then the bulls managed to wrestle prices back above this key area of support.

Furthermore, notice the extremely heavy volume that has taken place during the last week. It has been my experience that volume patterns, such as the one shown below, tend to preceed bottoms.

I think these two items represent bullish developments for the stock market, and, as such, I'm starting to scale back into some gold stocks now. So, best of luck, and thanks for stopping by.

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