This past week has created a bullish reversal. Stocks initially broke down from their bear-flag pattern on Monday only to reverse higher. This caught bears off guard and produced some short covering. Now the S&P 500 is sitting at three-week highs and looks poised to rally toward its 2012 highs set in early April.
I remain concerned that the market could see another drop in May due to seasonal trends and rising concerns over Europe, etc. However, this market has shown resilience and the ability to climb the wall of worry. We are not adding any new trades tonight but I did add four new candidate to the watch list. We now have a mix of buy the breakout and buy the dip candidates to trade from.