I wrote in my last post that a consolidation in the Standard & Poor's 500 Index (SPX) within a bigger uptrend has rather bullish implications than bearish until the major trendline is broken. Today’s market action apparently supports this statement.
Let’s look at the short horizon 2-box reversal Point and Figure (P&F) chart (box size is volatility adjusted). The SPX has broken out from the last three week consolidation which looks like an upside triangle (lime) and issued a triple top buy signal. What's more important is the index closed above two previous highs. The breakout from the consolidation and a new 52 week high close imply higher prices ahead in the short term. The horizontal count from the triangle consolidation projects the 1936 target. Now, let me be clear, nobody has a crystal ball and is able to forecast the future. Analyzing charts assesses probabilities. Today’s market action has shifted probabilities to the bullish side in the short term. A decline below the bullish support line (blue) will negate the breakout.
Disclaimer: I express only my personal opinion on the market and do not provide any trading or financial advice (see Disclaimer on my site).