The S&P 500 is currently sitting on an important support zone, the top of which managed to hold during yesterday's trading. The longer this level can hold and if price can move through the downtrend line, the less likely a retest of the December lows becomes. The same is true of the apparent rising wedge off the December lows that many people on FinTwit have been talking about. Wedges typically resolve violently and target the beginning of the pattern. Again, the longer that price action fails to act in this manner, the less likely it is that it will occur and when price action doesn't proceed 'as expected', this should always be taken as an important piece of information. In this case, suggestive of underlying strength.
It's worth noting that the NASDAQ composite, mid-caps and small-caps have already moved through their respective downtrends and are holding above support. That's the kind of behaviour that reflects a positive market environment and one of a few reasons why I believe the low is most likely in and we should be focusing our trading on the long side. The strong price action in EM as written about here is also a key part of my bullish thesis at present.
