On and Up Toward New Highs for SP500

Today’s bullish short-squeeze and continuation breakout activity confirms the bullish upward pathway that may continue to lead – once again – to new highs for the S&P 500.

Let’s update our pattern, view the pathway, and study what opportunities exist for us.

First, take a look at my two prior updates on this topic (before today’s confirmation):

Planning a Breakout (from a Repeat Pattern) in the S&P 500

S&P 500 “Breaks on Through to the Other Side

Decision Point for the Dow Jones

Today’s session further places the odds on the bullish side as price moves up above resistance and – likely (though not guaranteed) – toward the prior high into 1,990 (or even 2,000).

Quite simply, this is a “Repeat Pattern” as I’ve been highlighting to members and even on the open blog.

The pattern starts with a sharp breakdown (retracement) under the rising 50 EMA only to see a Stick-Save intervention boost price back above the 50 EMA (all this is highlighted yellow).

The next step (the outcome) is a short-squeeze/bullish buying pressure that thrusts price higher into the prior high or above (new highs).

IF history repeats, THEN we can expect price to trade higher into the 1,980 then perhaps 1,990 area.

IF the pattern fails, then price may fall a bit shy of the full target and then reverse sharply and violently lower.

Frame your trades in terms of the “Repeat Pattern” and “Uptrend Continuation” thesis which calls for the index to touch then perhaps break to new highs or the alternate “surprise” reversal (falling a bit short) thesis which would call for aggressive bearish trading.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter: http://twitter.com/afraidtotrade

Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).

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