After the new year started with a substantial rally, the markets have been in sleep mode. Two consecutive days of flat action has the pros salivating over the likelihood of further upside. Today, the SPDR S&P 500 ETF (NYSEARCA:SPY) is trading at $127.56, -0.07 (-0.05%). Let's explore the bullish case on the market.
1. The market broke out of a triangular range on Tuesday. This is significant as the markets had been inside this range for months. Note the chart below.
1. The market broke out of a triangular range on Tuesday. This is significant as the markets had been inside this range for months. Note the chart below.
2. The last two days have seen selling early, only to have the market float back up to the flat line. This shows resilience.
3. The Dollar has surged the last two days. Usually, a strong Dollar pushed the markets sharply lower. The markets have held their ground.
4. The last two days of flat action, following the break out show a clear bullish consolidation trend. This likely will lead to higher equity prices in the short term.
The upside targets on the SPY are $129.50. Should that level get taken out, $133.00 would be next. Take the seven day free trial of the Research Center and Intra Day Stock Chat. Join the elite pros who have called every up and down move in the market and nailed countless stock calls. Join now to profit with the pros.
Gareth Soloway
Chief Market Strategist
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