Market Turning Points | Andre Gratian | 2011-01-06

From Safehaven.com:

The market appears to have survived a steep correction and it looks as if the uptrend is still viable. This is perhaps best observed on the weekly charts. To resume its downtrend, the SPX would have had to close decisively below 1220 on a daily basis (but even that would not guarantee that we’d be on our way to making a new “bear market” low). Instead, it bounced back up and started a near-term uptrend which retraced .618% of the decline. It opened down on Friday, but could not follow through with the morning weakness, and closed on the high of the day. This is good technical action which suggests that there is more to come on the upside before the rally (which started at 1075) has reached its zenith.

Prices have been volatilely connected to the Eurozone situation. Now that the plans for a referendum have been cancelled, and the Greek prime minister has squeaked by on a vote of confidence and intends to resign, temporary stability has returned which may allow the SPX to reach its final rally target of 1310-1320.

In fact, the weekly charts suggest that the indices are just breaking out of their last intermediate downtrend, and they may have some distance to go before the new uptrend is complete. We’ll start by looking at a weekly chart.

Continued

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