For the past six weeks Global markets have tracked sideways in a major time correction, digesting the gains since march 2009 (basis S&P 500). Price has been capped by the horizontal blue line representing the 50% split between the 2007 high and the 2009 low. This has been important resistance and a psychological barrier to the continued upward momentum of the market. For the first time price is now trading above this level which could signal the next bullish expansion in the markets. The bulls are in control of the market, as defined by the position and direction of the 10, 20 and 50 SMA (simple moving average). As of the 5th of January 2010 the 10 SMA is above the 20 the 20 SMA is above the 50 and all averages are pointing up. The next major level of technical resistance is 1230. This represents the Fibonacci 0.618 division of the 2007 high and the 2009 low.
A complete update of the macro view of the market is given in detail on the first Wednesday of every month in our Live Market Briefings.