S&P 500 close = 1066.11

Signal = BL/L

The markets started off strong after the GDP number came out better than expected. This number combined with oversold markets was the reason for the massive gains today. From a technical perspective, it was bound to happen on any decent news.

I said yesterday that if we broke 1055, the short-term trend would revert back to positive. The markets broke that level fairly shortly after the open and never looked back. I had a contingent order to by BGU on that resistance break and was happy to ride this groovy train up from there. I was careful to protect my profits all day today since the markets have been a little more jittery lately. I got stopped out at the end of the day on a break of 1064.

Tomorrow's price action is a little difficult to forecast, however, the short-term and intermediate trends are both positive. Thus, the benefit of doubt must be given to the bulls. On the top side, the levels I will be watching are the 20 dma - which as of today's close is at 1071 and also the 1074-1075 area which played a significant role as a support level on the way down not too long ago. On the downside, the nearest important support level is at 1060. The other thing to watch tomorrow will be the US dollar. The dollar dropped today which also helped the markets to rally. However, at the end of the day there was a small spike in the dollar that took it above a short-term resistance level. It will be important to see how this trades overnight as it will definitely effect the markets tomorrow.

Levels to watch for tomorrow:

1071 - 20 DMA; likely to act as a first level of resistance

1060 - current area of short-term support; In the morning if the markets give back a few points, I may go long near this level and place a stop right below it. Remember, it's all about reward/risk.

See you tomorrow. Also, I will be off next week and will not be trading or writing at all. Off for some fun in the sun.