The Bullish Trend Continues

SPX Daily Chart

Based on the market action of the past two days, I suspect that we are now on our way to the next phase projection target of ~4100-4150 before consolidating.  

After correcting down to the 3723 support, the index made a new high at 3980. Minor congestion at that level suggested a consolidation pullback to ~3855 before embarking on the next phase of the uptrend that started from 3723. This pullback was accomplished over a 10-day period, culminating with a retracement to 3853.50 last Thursday, and followed by an immediate reversal of over one hundred points by Friday’s close with the index closing near its high at 3974.

The recent high of 3981 should not be much of a challenge to overcome and, whether SPX pulls back slightly before moving higher or goes straight through, its next target should first be about 4150 and then about 4300. These projections are made based on the congestion established at the March 2020 base, and they are being confirmed by more recent SPX patterns.  

Although the oscillators are currently lagging, it is not a sign of negative divergence and they should move higher and confirm the new uptrend over the next couple of days.

SPX Hourly Chart 

The consolidation at the 3980 top created a small amount of congestion with a count down to 3855-60. The pullback lasted seven days and brought the index down to 3853 on Thursday, where it also found support on the previous declining channel line from 3950.

From there, a rally started which quickly rose above the short-term downtrend line from 3980, briefly pulled back, and continued to close the day at 3974 on Friday -- one hundred and twenty-one points from Thursday’s low and only five points from the previous high.  

There could be a minor pullback on Monday, but the structure is suggesting that wave 3 of 3 may already be on its way; and for this reason, we could push to at least 4080-4150 before it comes to an end. Whether or not this is exactly how the structure develops, it is likely that SPX is in the process of forming a new upside (green) channel and could move close to the top channel line before consolidating.

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Charts are courtesy of QCharts.

The above comments, as well as those made in the daily updates and the Market Summary about the financial markets, are based purely on what I consider to ...

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