Why There’s Still Hope for the Bulls

The U.S. dollar has broken to new highs, commodities have fallen sharply, and
emerging markets stocks have been crushed. That's the bad news. But here's
the good news: Despite the turmoil in other markets, the S&P 500 is stubbornly
holding its support at its March high of 1,332. Thursday's low was 1,332 and
Friday's low was 1,333. Now consider the similarities of the charts of the S&P
500 and Nasdaq, despite their very different makeup. The Nasdaq is holding above
its March high, as well as the support line (black dashes) drawn from the March
high to the April high, like the S&P 500, and its chart is even slightly
stronger than the 500's since it is still holding above its 20-day moving
average (green line) and the intermediate trendline just below 2,800 (red
dashes).  And both indices are well above an important 50-day moving average
(blue line), which, if broken, would put the intermediate-term uptrend in doubt.
Meanwhile, the Dow Jones Industrial Average is so strong that it hasn't even
pulled back to its April "deep V" breakout line at 12,400 to 12,455. It is
important to remember that a market is generally considered healthy when it is
led by the highest quality stocks, and none is higher, as a group, than the Dow
30. With the toughest six months of the year ahead of us, there is no way to
know for sure which way this situation will break. But it can't be denied that
stocks have shown a remarkable ability to hold at a crucial support area in the
face of the most unsettling news and that's usually constructive for the
bulls. For one blue chip delivering solid gains, see the Trade of the Day .
Todays Trading Landscape To see a list of the companies reporting earnings
today, click here . For a list of this weeks economic reports due out, click
here .