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Jason Haver: US Equities Finally Reach the Decision Point
The market has finally entered the key upside inflection zone and should soon be sorting the bulls from the bears.
Jason Haver    

In my last update, I expected the S&P 500 (INDEXSP:.INX) would rally to new all-time highs, and we didn't have to wait long for that expectation to prove out. The stock market has finally entered the key upside inflection zone, so this is where things will get interesting (for the first time in a while -- thank goodness!).
 
In a perfect world, I'd like to see SPX head a bit higher -- but if this breakout is a head-fake, the market is going to want to throw a few more curveballs in here, and the rally is likely to end abruptly and unexpectedly. I've added a bull count to the chart below, and in the event of a sustained breakout through the upper red trend line, we'll have to consider the potential that the last few months were a coiling pattern headed for the upper 1900s or beyond. Until that breakout comes, though, bulls will want to avoid complacency in this inflection zone.

 

Click to enlarge
 
I've updated the near-term support/resistance chart below. There are a couple of confluences of support that should help offer clues as to the strength or weakness of the recent breakout.
 
 

Click to enlarge
 
I've also updated the NYSE Composite (INDEXNYSEGIS:NYA) because the pattern here gives us a near-term upside level to watch for clues of market strength.
 


Click to enlarge
 
In conclusion, the new all-time highs in blue chips came as no surprise, and SPX is now sitting inside the key upside inflection zone of 1900-1920. If it can push through this zone, then bulls will have something of an "all-clear" signal. But as of yet, the breakout hasn't been substantial, and we're continuing to see weakness in beta indices -- so this is no place for bulls to get complacent. Trade safe.

Follow me on Twitter while I try to figure out exactly how to make practical use of it: @PretzelLogic.
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Jason Haver: US Equities Finally Reach the Decision Point
The market has finally entered the key upside inflection zone and should soon be sorting the bulls from the bears.
Jason Haver    

In my last update, I expected the S&P 500 (INDEXSP:.INX) would rally to new all-time highs, and we didn't have to wait long for that expectation to prove out. The stock market has finally entered the key upside inflection zone, so this is where things will get interesting (for the first time in a while -- thank goodness!).
 
In a perfect world, I'd like to see SPX head a bit higher -- but if this breakout is a head-fake, the market is going to want to throw a few more curveballs in here, and the rally is likely to end abruptly and unexpectedly. I've added a bull count to the chart below, and in the event of a sustained breakout through the upper red trend line, we'll have to consider the potential that the last few months were a coiling pattern headed for the upper 1900s or beyond. Until that breakout comes, though, bulls will want to avoid complacency in this inflection zone.

 

Click to enlarge
 
I've updated the near-term support/resistance chart below. There are a couple of confluences of support that should help offer clues as to the strength or weakness of the recent breakout.
 
 

Click to enlarge
 
I've also updated the NYSE Composite (INDEXNYSEGIS:NYA) because the pattern here gives us a near-term upside level to watch for clues of market strength.
 


Click to enlarge
 
In conclusion, the new all-time highs in blue chips came as no surprise, and SPX is now sitting inside the key upside inflection zone of 1900-1920. If it can push through this zone, then bulls will have something of an "all-clear" signal. But as of yet, the breakout hasn't been substantial, and we're continuing to see weakness in beta indices -- so this is no place for bulls to get complacent. Trade safe.

Follow me on Twitter while I try to figure out exactly how to make practical use of it: @PretzelLogic.
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap
Jason Haver: US Equities Finally Reach the Decision Point
The market has finally entered the key upside inflection zone and should soon be sorting the bulls from the bears.
Jason Haver    

In my last update, I expected the S&P 500 (INDEXSP:.INX) would rally to new all-time highs, and we didn't have to wait long for that expectation to prove out. The stock market has finally entered the key upside inflection zone, so this is where things will get interesting (for the first time in a while -- thank goodness!).
 
In a perfect world, I'd like to see SPX head a bit higher -- but if this breakout is a head-fake, the market is going to want to throw a few more curveballs in here, and the rally is likely to end abruptly and unexpectedly. I've added a bull count to the chart below, and in the event of a sustained breakout through the upper red trend line, we'll have to consider the potential that the last few months were a coiling pattern headed for the upper 1900s or beyond. Until that breakout comes, though, bulls will want to avoid complacency in this inflection zone.

 

Click to enlarge
 
I've updated the near-term support/resistance chart below. There are a couple of confluences of support that should help offer clues as to the strength or weakness of the recent breakout.
 
 

Click to enlarge
 
I've also updated the NYSE Composite (INDEXNYSEGIS:NYA) because the pattern here gives us a near-term upside level to watch for clues of market strength.
 


Click to enlarge
 
In conclusion, the new all-time highs in blue chips came as no surprise, and SPX is now sitting inside the key upside inflection zone of 1900-1920. If it can push through this zone, then bulls will have something of an "all-clear" signal. But as of yet, the breakout hasn't been substantial, and we're continuing to see weakness in beta indices -- so this is no place for bulls to get complacent. Trade safe.

Follow me on Twitter while I try to figure out exactly how to make practical use of it: @PretzelLogic.
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
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