Thursday, July 07, 2011
The top chart was posted last week. Since then the market has been even stronger than I had anticipated. The chart immediately above this post brings the top chart up to date.
As I said last week, I think the 1420 upside target associated with the point and figure count across the June base will prove to be too conservative. Indeed, pessimism was rampant at the June low and even more intense than it was at the July 2010 low. The market rallied 37% from the July 2010 low. Even half that percentage gain, 18% from the June 2011 low, would put the S&P at 1490. A full 37% up from the June low would put the S&P at 1715!
While I think that 1715 may be a tad optimistic, I do think a move above the 1500 level is quite likely before the next bear market sets in.