The State of the Trend
After denying for months that Greece will ever default on her debt, Euro politicians solved the crisis by simply acknowledging the inevitable and leveraging up. Or so we are lead to believe. After consolidating briefly at the beginning of the week, the SP500 rallied further, to achieve a 20+ percent gain in 17 trading days, and reached our upper channel target of 1290. At this rate the index will double in... Well, you do the math.
The SP500 also caught up perfectly with the 1998 advance, as outlined a couple of weeks ago:
But, as I pointed out twice in July, the vitality of this rally needs to be validated by the Q's. They need to break above multi-month resistance at around 60, which has proven to be mission impossible so far this year:
While there certainly has been a change in the way the market responds to overbought internals, the level of bullishness has reached peak levels, similar to what we witnessed in September and November of last year:
Judging by all this, another consolidation is in the cards. This week channel resistance moved up to 1310 and 1335, while the daily pivot is at 1257. You can monitor these levels for yourself all day long with the OddsTrader app.