The S & P 500 will break to new all time highs. I have no doubt in my mind as of June 20th 2005 that the S&P 500 will eventually break out to new all time highs and likely head for a test of the next swing point of May 22nd 2001.
We saw very good volume expansion on the S P 500 on June 17th, 2005. This volume came through despite typical slow summer trading activity. But more importantly the volume came through significantly higher than the previous price swing of January 3rd 2005. March 7th, 2005 still needs to be tested in terms of price and volume, however given how the S P 500 has pushed up against this resistance line with above average volume, the evidence suggests a break of resistance is coming.
How do I know that we will break to new highs and likely attack the swing point of May 22nd 2001 ??? Well the evidence comes mostly from the S P 500 volume analysis, the most powerful analysis you will ever encounter in your trading matters. As you can see from the chart I have created to the left there is the specific resistance level of 1220 on the S P 500. On June 17th 2005 we tested this level. The volume on June 17th was 2 billion shares. This volume was about 33% greater than the previous swing (Jan. 3rd 2005) volume of 1.5 billion shares. The three price swings around the date March 7th 2005 have volume betweeen 1.4 and 1.6 billion shares. These have not officially been tested yet.
The volume expansion on June 17th was extraordinary! This market wants to push higher and do so in a big way! The volume is the energy, the force and the reason why the market will move higher above the 1220 resistance level and head for the May 22nd, 2001 swing.
"If the market tests a previous swing on equal or greater volume, ultimately that swing will at a minimum be tested and likely exceeded".
Not only did we test the Jan 3rd, 2005 swing on equal volume, we did so on about 33% greater volume!
The bull market lives on!
P.S. The gold market is also extremely interesting at this point! Will the gold market head to new highs? It would be truly extraordinary to again see gold and the S P 500 breaking to new highs at the same time! If it happens it will be absolutely fascinating to me! Stay tuned for my gold analysis.