After finding support at the VWAP from the January low over the last week and a half, the SPY was finally able to recapture the VWAP from the beginning of 2016.

The longer term trend remains suspect (bearish) while the market is below the declining 50 and 200 day moving averages, but as long as the market remains above 190.50-191.00, this bounce should continue.

The most likely level of potential resistance lies between 199-201 which is where we find; prior support, the declining 50 DMA, VWAPs from August and September climatic lows and VWAPs from the recovery highs. Of course, anything is possible, our job is to focus on what is most likely and then to manage risk.

With longer term bearish forces still at hand, it is important to remain focused on only taking low risk entries (not buying extended moves) so we can have a tight stop, based on price action, in case the market disagrees with our timing.