The S&P 500 rose during the course of the week, breaking out to a fresh new high. Because of this, we are very bullish of the S&P 500 and believe that we will eventually hit our longer-term target of 2000. This is a market that has been in a very nice uptrend for some time now, and until something major changes, we don’t see any argument for shorting this market. We also believe that the 1900 level will continue to be the “floor” in this market, thereby making this a “buy only” type of situation.
The 6 months daily bar chart pattern of S&P 500 has been consolidating sideways within a symmetrical triangle pattern since touching a lifetime high of 1985 on Jul 3 ‘14. Triangles tend to be continuation patterns, so the eventual price break out should be upwards.
However, triangles are also unreliable. Price can break downwards or continue to move sideways and break out through the apex of the triangle. That means, one needs to wait for the eventual break out before initiating any buy/sell decision.
