It really does look again today from today’s stock market action that the future tape into the end of this year is going to be quite bullish. The XLF looks like it is projecting a move to near the April 2010 highs. The broad market should at some point get to a challenge of the April 2010 highs as well.
I have to once again revert back to my ‘forest for the trees’ scenario of longer term bullish the stock market which I wrote up on July 8, 2010. My frame of mind now is not to look for the next top or a crash, but instead just for upside continuation working towards an eventual upside breakout of the April 2010 highs. I suspect that eventually we are going to start seeing an unemployment rate (see my MACD of the unemployment rate) that starts to tick DOWN and should help the stock market get some big upside moves.
The PowerShares QQQ Trust, Series 1 I suspect is about to bust out north and should be able to create a ‘busted pattern’ setup where it first broke down through its symmetrical triangle, then rallied back up to the apex (right about where it is now) and now appears ready to bust out north from the apex level again. That would create the exact opposite directional implication of this large symmetrical triangle (the original one was down, now it is likely to be up).
In addition to this symmetrical triangle on the PowerShares QQQ Trust, Series 1 there is also the much larger pattern I discussed before which is the head and shoulders bottoming pattern. This large pattern projects about 25 points higher from the neckline on the QQQ’s and has a potential price target of 75 on the QQQ’s. This is an extremely important insight to be aware of especially if you tend to stick with long ETFS or leveraged long ETFS. The most important part of the pattern at this point is the neckline which comes in at a value of 50.65. A northward break from that level ought to contain wide price spread and massive volume. Then after the break, a retest of that level should confirm it as support. One of the best risk/reward trades is to first WAIT for the breakout above this level and then WATCH for the retrace back to 50.65 as a normal test of new support.
The Astro aspects have completely failed. At this point I would have to say that it looks as though they will be completely irrelevant and have probably inverted. This is about the worst thing that can happen for those who follow Astro blindly and do not use technical analysis as confirmation. A simple up trendline from the July 1st, 2010 low is a clear fail/success line for all these astro forecasts. The strong bounce higher today off of this uptrendline for the 3rd time says the Astro forecasts will likely fail miserably. Look for a break down below this near term uptrendline for any hope of possible remaining bearish Astro scenarios coming to fruition.