This post continues the theme of my last post, and updates my Nov. 12th post.  The chart here is the update of the Nov. 12th chart; it’s a monthly bars chart of the S&P 500 in EquiVolume display.

You can see that the S&P 500 has clearly broken above that cluster of resistances around the 50% retracement level, and is now up against the primary resistance curve.  If it continues above this level (1150), and I think it will, then the next upside target is provided by the confluence of three things:  the 61.8% Fib level, the highest resistance curve, and the projection for the end of the TopFinder.  All three come together at a price of about 1230, in approximately two to three more months.  Because all three of these come at about the same price and time, this is likely to be the end of this monster of an uptrend that started in early March of last year.  I have no visibility as to what happens after that.

In my previous post, I said that the market has broken the pattern of the 1930s.  Specifically, I mean that it appears that the market is not rolling down from the critical resistance level into the beginning of a very major new bear market, as it did in 1930.  This describes the present and near future.  But it says nothing about the next several years.  During this decade that we’re beginning, we still have to suffer the negative effects of the aging and retirement of the Baby Boomers, something whose effect has yet to be felt.  So, although the recent breakout above the critical resistance level is a welcomed event, and distinguishes the present from what happened at this point in 1930, it does not say that we’re out of the woods for this decade.

My disclaimer/disclosure applies to this post.

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