Equity breaks out of Falling Channel
After a very last ugly week or so, the S&P finally broke to the upside of its steep falling channel. Why? Maybe strong reported retail sales, maybe European hope, maybe just oversold conditions and a short squeeze. Who knows. But this kind of a manic rally is par for the course in a bear market.
Here’s how I see the recent chart, and I’ve circled a couple spots where I think this rally will face resistance, should it continue higher. The first target is around 1215, where the 20 day exponential moving average is currently crossing under the 50 day EMA. Should the market rally above those moving averages, it will face falling trendline resistance around 125o.