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Michael Kramer owns IWM Calls
The S&P 500 left off on the cusp of a major a break out last week, and so did the Russell. This week, I think the data comes in that suggests the global economy is on the rebound, and earnings continue to come in strong. It will send the S&P 500 into uncharted territory
S&P 500 Break Out (SPY)
The chart of the S&P 500 is fascinating when you look at this new one I drew up. I do not believe this is a coincidence either. Off the 2310 low, the S&P 500 rose higher in the three consecutive series of about 170 points, followed by periods of consolidation.
When the S&P 500 crossed above resistance at 2,860, there were three series of jumps of around 130 points. It would suggest that next move higher for the S&P 500 is to 3,031? If we see the fourth series. Or perhaps a jump to 3030, or 2,990 if we drop to a rise of just 90 points. Get it: 170-130= 40 points 130- 40 points = 90. I am using a starting point of 2,900 for this recent rally.
Based on the timing it could happen within the next 2 weeks.
Meanwhile, we can also see that Russell is on the verge of a significant breakout. I redrew the chart, and you can see the giant ascending triangle. A break out sends the index higher towards 1,683.
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