SPY Chart – April 22, 2010

I charted the S&P 500 ETF, SPY, just before 2:00 pm today.  After a long overdue dip, SPY has seen three decent steps back in the past five days, but each one has recovered by the close.  Today seems to be following the same course.  SPY found support on its trend line of higher highs and bounced hard from there.

The support area was a previous line of resistance and later support showing the 119 area is going to be one to watch in the future.  To the upside it looks like $121.00 – 121.50 might be the next line of resistance.  Since I’ve been typing this in the past 10 minutes SPY moved above the shortest trend line of lower highs from the past couple of days.  I’m still cautious about jumping in here, but once SPY clears $121.50 we could see another leg of the rally take it all of the way up to its upper trend line of higher highs.