In focus: Bullish breakout

By Lawrence G. McMillan

In a somewhat classic move, “everyone” was bearish and yet the market broke out to the upside. The most recent upside move kicked off in earnest last Friday, after yet another apparent agreement in Europe.

In reality, though, the Standard & Poor’s Index  had been exhibiting good strength the prior three days, as it had rallied off the 1,310 support area. This week, the strength continued, with SPX now closing above the June highs. This is very important for it makes a pattern of higher highs and higher lows on the chart, which of course is quite bullish.

There should now be support in the 1,330-1,340 area again, and on the upside SPX should be ready to challenge the 1,390 area and then the yearly highs. We continue to look for SPX to move to 1,440 or higher.

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