The daily price action is important as it builds the weekly and monthly price action, but it can be confusing. It’s therefore good to also have a “10,000 foot view” of the market. Using the weekly and monthly charts we can then rather easily determine price targets based on these longer term price patterns.
First up is the monthly chart, going back all the way to the year 1990. What we can see is in essence a 20 year long consolidation between SPX800 and SPX1575. In early 2013 the market was finally able to break above this key level, and simple symmetry then tells us to expect at a minimum an equal distance advance: 775p; thus targeting SPX2350.
So far the market has not disappointed, and although it certainly wasn’t a straight shot, but we can clearly see that the trend is up and SPX2350 is within spitting distance. Based on EW count we certainly expect this price level to be reached. We also expect a minor correction from about that level, but higher price levels will then be reached.
These higher price level targets (SPX2400+) are found when we do a similar analyses of the weekly chart of the S&P500. Also here we see that price broke above a long term consolidation pattern (green lines) and the equal distance (blue) arrows then targets SPX2425ish, from the breakout level (green arrow).
Also this target is in line with our EW count, but again will likely “only” result in a correction -though we expect a longer and deeper correction from there than from around SPX2350- as we do still expect higher prices still before this Bull ends. How high? That target is reserved to our premium members.