As I type, the S&P 500 is within one point of its all time highs set back in February. The question now is whether we will see a new leg higher that leaves this choppy consolidation behind? Or will the choppiness persist, limiting the move?
Here is a chart showing the break above the upper wedge line around 2107. This lead to the quick move higher to test the S&P 500’s all time highs.
S&P 500 Chart
The chart above is helpful in understanding that there are near-term implications for traders on a break above the February highs. However, if we zoom out, we can see a bigger picture of what’s been going on (see chart below). It’s been a sideways grind higher for several months, with more sideways over the past 4 months as momentum slowed. But a breakout to new highs could be enough to propel the S&P 500 back to the top of the channel. Overhead levels reside at 2140 (the major 1.618 Fibonacci extension level) and 2160-2170 (the top of the channel).
At the same time, a failed breakout that moves back below 2100 would indicate that the market is still sloppy and undecided.
Thanks for reading.
   Twitter: @andrewnyquist
The author carries a net long position in S&P 500 related securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
