In focus: Bulls in paradise

By Lawrence G. McMillan

The bulls aren’t going to find a much better market than this one. Overbought conditions are worked off with minimal — almost “stealth” — corrections. Volatility remains low, while prices continue to rise. Support levels continue to build up along the way. And public opinion remains skeptical or even bearish in certain areas.

The Standard & Poors 500 continues to trade in a very bullish pattern. On most days, it opens lower, then rallies to regain most or all of those early losses by the end of the day. Occasionally, it has a strong up day, like it did a week ago when it broke out to new post-2008 highs, over 1,380.

Since then it has made even higher, new post-2008 highs. That 1,380 level remains strong support, especially since the 20-day moving average has now risen to that level as well. Below there is the very strong support at 1,340, most recently visited during the first week of March. Finally, the trend line that defines the bull market is at about 1,320 (see chart below).

To read the full article, subscribe to The Market Watch Options Trader.