U.S. Stocks In The Process Of A Huge Breakout, On Their Way To All-Time Highs

Chart analyst • Apr 19, 2016 at 11:13 PM EDT

The U.S. stock market has fully recovered, and volatility seems to be gone. Although many are looking at new all-time highs for a breakout, we believe the breakout took place yesterday and today.

The U.S. stock market has fully recovered, and volatility seems to be gone. Although many are looking at new all-time highs for a breakout, we believe the breakout took place yesterday and today. As the chart below shows, the descending trendline was cleared, confirming a breakout.

The clearance of all-time highs seems to be only a matter of time.

S&P-500_April_2016

According to Sentimentrader, hedge funds have been buying in stocks, as their exposure to stocks has increased over the past month, to the top 10% of its range.

Moreover, a new high in the Advance/Decline Line tends to lead to gains. When the A/D Line moves to a multi-year high, the S&P 500’s maximum loss at its worst point over the next year has averaged -3.9%.

As the breakout is a fact, it is a matter of holding this level for a couple of days for a final confirmation. A break through all-time highs should be a matter of days or weeks then.

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