S&P 500 Analysis, Stock Market Update

The market has reached an interesting point, which means it is time to look at this market again. In previous analysis I mentioned a target of 1000, and 1020. The second profit target should have actually been 1025. My bad. Either way, both were exceeded slightly and we have had a close at 1030-1031. Therefore the profit target from the breakout of the range, which lasted from May through July, has been achieved.

Now it is time to see if this market has more steam. I am still skeptical of this rally. Fundamentals don’t seem to be matching up with the market, but that is why I am technical trader/analyst. The market is providing opportunities and we need to trade them no matter what our personal belief might be about what is happening.

From the chart you can see I put a small trend line on this last leg of the rally. This is not a critical trendline, but since it intersects the profit target area it is given a little more credibility. Being that we have exceeded the profit target, a point where we expect to start to see diminishing strength, if we drop back below that trendline it indicates we are a likely to experience at least a short-term reversal.

A rise and close above 1031 indicates another swing higher. IF that were to occur targets at 1065 and 1100.

Downside targets are 980, 950 and 920.

S&P 500 Daily Chart

~Cory Mitchell, CMT
Chief Market Strategist
Remember, failed breakouts are tradeable too!

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