U.S. Markets breaking to upside?

Anyone who has followed my blogging knows that I’ve been bearish for a long time. I remain psychologically bearish. But I trust the pictures painted by market participants more than my own analysis of underlying fundamentals. As technical analysis goes, just two current pictures suggest a fairly clear (and bullish) reading of the market environment.

The S&P (SPY) appears to be breaking out. We’ll see how this plays out in the coming weeks, but given that there has been strong resistance for 18 months now, a break-out seems likely to suggest significant upside in my view.

2016-07-12-ES-LT_CHARTS

Here is a shorter term look at the S&P.

2016-07-12-ES-ST_CHARTS

Alongside the breakout in U.S. equity markets is an apparent topping in long term U.S. Treasuries (TLT).

2016-07-12-TLT_CHARTS

All of this appears to portend a very equity-friendly environment going forward. It may be the commodities will be along for this upside ride after missing out entirely in the most recent equity rally.

Headfakes do happen, so that’s something be wary of. Treasuries seem to confirm equity upside, as I see it, but time will tell. Happy trading.

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