Written by Rick Ackerman, Rick’s Picks
The bullish pattern shown below is a beauty that meets all of our rules, implying that more upside to at least 2810.00, the pattern’s ‘D’ target, is very likely over the near term.
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However, that would leave the futures just shy of the key ‘external’ peak at 2814.00 recorded in mid-March. A decisive push above it would be quite bullish, since it would generate projections to as high as 2997.75 (equivalent to Dow 27,000).
Another possibility to which we should be especially alert is for the rally to sputter out a few points above or below 2414.00. If so, we would take steps to prepare for a possible ‘counterintuitive’ short in the usual way – i.e., using SPY or DIA put options.
Another scenario calls for a downturn from current levels followed by a plunge into hell. This seems unlikely, but we should be ready in any event. I mention it because Friday’s high occurred in a crucial spot, almost precisely at the 2768.00 ‘midpoint pivot’ of the big pattern projecting to 2997.75.
We should know by week’s end whether the long-term bull market is about to get back in gear following five months of nasty chop since early February’s steep sell-off. Stay tuned for updates, the most timely of which will be posted in the chat room.
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