sp500 Getting Ready to Blast Through 1200

Today was a consolidation day in the sp500.  There was minimal price give back given yesterday’s huge surge.  I interpret this as just another sign of the current internal strength of this market.

The sp500 is poised for a revisit of 1200  and then eventually the old April 2010 highs of 2018.  The exact timing of this is of course very tough to be precise about, but I am going with the theory that it could happen before the November elections, possibly sooner.

Do I think we are going to go up in a straight line? Of course not.  But this uptrend could resemble the slow and steady ‘trickle up’ that we saw in the gold price before it was able to break out to life time new highs.

When and if the sp500 starts to inch above the 1218 highs, I do expect a much more massive upward surge in the market.  It will likely be a combination of final capitulation short covering, new buying and buy stops.  Ideally such a move would also come with massive topside volume.

The Dow Jones Industrial average confirmed a daily MACD histogram buy signal today.  The other indices are still playing catch up however.

I don’t recall ever being so confident in my convictions as I am now.  The last time I remember being so confident was when the bombs were falling in Iraq in 2003 and the market blasted higher after a long low volume triple bottom.

sp50020101006

Having said that, I still expect there to be a reaction at the 1173 level and the 1185 and 1215 levels.

The market is on track to create a bullish confirmed monthly MACD histogram buy signal.  It will be another few weeks before that can be verified but I think we have a good shot at it by end of October.

Posted in Index Trading, Market Timing, Technical Analysis
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3 comments on “sp500 Getting Ready to Blast Through 1200
  1. Tom Tom says:

    Interesting. Nice Chart Ed.

  2. Geoff says:

    I am investing as if you are wrong; holding lots of cash, some gold, and short a med bit. The 10 moving average of daily AD is getting extended, the same is true of 10 ma of TRIN/ ARMS, the Aall Investor Sentiment Index for latest period ending yesterday was 49% bullish – – up 6.5% from prior week, the Consensus Index bullish last week was 63% and if it follows same trend as Aall than it might be at 70% this week (very high), the Euro has had an incredible rally from the lows of July when it was 1.19 and everyone was thinking it would go to parity, and gold has had an incredible rally.

    At minimum it is time for a rest, consolidation, or an outright sharp fall in the market. I think only the latter would make investors less “giddy”. I do not buy 1200.

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