I’ve been expecting new, all-time highs in the popular averages. Today, the S&P 500 hit – and closed at – a new, all time high. And there’s more to come. Throughout this bull market, the S&P has traded in a series of parallel 1 X 1 channels. The latest push higher is on track to tag the upper pattern boundary of the 1 X 1 depicted on my chart in cyan blue. I expect we will see that upper 1 X 1 tagged early next week. Given the strength of the move now underway, I would look for the S&P to extend beyond that upper pattern boundary just a tad – eventually tagging the next major price octave at 2,125.00 on this accelerated move higher. From that point, I would expect a modicum amount of resistance to occur from which a new 1 X 1 channel will take form.
The chart of the New York Composite Index ($NYA) at left depicts an index now breaking out above the upper pattern boundary of a “symmetrical triangle.” The next likely area of resistance for this index – the broadest measure of the New York stock exchange – is likely to occur at the 11,250 price octave – just over 200 points above today’s close. The Bull Market Express Rolls on!
Although the Dow Jones Industrials have lagged the S&P 500 just a tad in this latest push higher I expect we’ll see the DJIA play catch-up here very shortly. The next price octave above 17,500 occurs at 18,125. But given that the upper pattern boundary for the 1 X 1 angle depicted on my chart occurs at 18,178.5 I would expect the Dow will cut through 18,125 fairly quickly – then “walk-up” the 1 X 1 angle as it has in the past. The next major octave above 18,125 occurs at 18,750 and could be more-formidable resistance. I suspect we’ll be looking at DJIA 20,000 before this market tops-out later this year.
Bond prices would appear to have hit an intermediate peak and, alternatively, bond yields would appear to have hit an intermediate low. The TYX chart above shows the sharp rebound off the recent low at 2.23. Price on the TYX chart is likely to advance back to the downtrending 20 day moving average, undergo some back-and-fill, then push higher.
On the gold chart, price has broken back below the all-important 1,250 price octave. Notice the effect of this magic line over the last year. I look for further sideways chop either side of this level before the bear trend resumes.
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