Although the SPX, and its ETF the SPDRs (AMEX: SPY) have not made new multi-year highs again this week (not as of this update), this week’s sharp upside reversal certainly gives the chart pattern the look of a market that is starting a new upleg. If that proves to be the case, then we should expect the SPX to climb towards the target derived off of the head-and-shoulders base that was created during the 2002-04 timeframe, which projects to 1570. Such an upmove will amount to a 2.3% climb from current levels. At this juncture, only a break of recent lows at 1492/87 will invalidate the bullish projection and reverse my near-term polarity altogether.



Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com, a real-time diary of his technical chart analysis and trading alerts on all major markets. For more of Mike Paulenoff, sign up for a free 15-Day trial to his MPTrader Diary by clicking here.