Friday, July 26, 2013
reaction then higher
As you can see this market average has rallied to a new bull market and historical high near 1698. I think it will move still higher over the coming months with 1775 my conservative target and 1900 as the more optimistic target. At 1900 the move up from the June 2013 low would equal the size of the November 2012-May 2013 rally.
On the way up there will be reactions and one of these started a few days ago. If it were to equal the size of the biggest reaction on the way up from the June 24 low the S&P would drop to 1674 or so before moving above the 1700 level (blue rectangles. There is also support at the July 17 low near 1672 (green line).
The ES drop visibly below 1672 it will probably continue downward to the midpoint of the rally from the June low which currently stands near 1628 (purple line).
In any case there is no sign yet that the bull market which started from 666 in March of 2009 is over. So far it has lasted 52 months, quite a bit longer than a normal bull market. But the 2002-2007 bull market was also unusually long and lasted 60 months. As I have mentioned in previous posts George Lindsay time periods suggest a bull market top this fall or early next year so there is plenty of time left for the current rally to extend to the 1774 and 1900 upside targets.