Today the major indexes closed near the top of the range after being down pretty significantly and almost reaching new lows. The bulls showed up as the possibility of going long is now on the table.

The smart play here is to wait and see where things shake out tomorrow. Don’t rush in at the open and enter a position without knowledge of where the professionals are pushing the market.

Here’s a chart of the S&P 500:

The S&P 500 is reaching a tipping point as the resistance and support collide.

There are two points for a bullish rally and one against.

First, the S&P 500 had two days where it fell below the support line rather severely (the two green lines extending below the pink “Support” line). Instead of rolling over, we saw the index push back on increased volume to finish near highs above the line of support. Secondly, we’ve already seen a v-bottom occur at this level back in February.

Conversely, the resistance line is growing closer and closer to the support line. This would suggest that we might see a downside breakout as stocks are pushed lower by the short-term down trend.

As I said earlier, best bet is to keep an eye on things and see how the market reacts to these forces. Once we get a clue as to the trend of the market, invest in that direction.