The S&P 500 continue through the resistance level for two days and confirmed that a breakout was on. Based on the standard measured move, I would expect the S&P to continue upward until it reaches $2298 or another 3.8% rise from the close last Friday. Does it go straight up to that point? No, most likely not. In the last 14 trading sessions, there has only been one down day so I expect soon there is going to be at least a pause or consolidation. Not even a rocket can go straight up forever, eventually it will pause or come down. I do expect that we will reach that $2298 level soon because we have been grinding for almost 3 months.
Just like the S&P, I feel the Small Cap will soon have to pause while the professional traders take profits. The Small Cap is up 14 days in a row and a down day is overdue. If you are waiting to get in, maybe you should wait for that pause. I will do my best to attempt posting with a new entry as I see them.
The International finally looks like it is going to pause here and try to find support. That doesn’t mean that this is the entry or a reverse. It means that it appears and will need time to prove that this is the bottom. The green CBL line and the 50 day ma is the signals will need to see price go back through before we can call a buy here. Sit and watch.
Bonds continue to work lower. Since the high bubble on the chart was flagged, Bonds have given back all the gains for 2016. Want to see where the monthly move got us out? The chart below is the weekly chart so you can see the entire year and the give back of all the gains. I also marked the point where the monthly told us to bail out. Not a bad call either. I’ve said it before and I’ll say it again. The monthly will never get you in at the bottom or out at the top, but in the majority of the cases, it will get you the meat out of the middle.
Conclusion: The Small Cap and S&P 500 are over due for a pause, consolidation, or pull back. So do not be surprised to see that start to happen soon. It is possible after the shopping reports come in from after Thanksgiving that we could see more upside short term. But I warn you, eventually this straight up rise will eventually stop. Bonds and International are stil a no go and Small Cap and S&P 500 are a go.
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