The SP 500 is in a confirmed short to intermediate term rally. It is now mildly overbought
only on shorter term price momentum, but has the potential to run significantly further on the
extended time shorter run indicators shown. SPX Chart
The trendline support for the rally is inconclusive and will remain so until the SPX can move
decisively above resistance / congestion in the 1460 - 1470 area on the SPX. In fact, even if
the SPX was to close out 2012 in the 1475 - 1500 area, it would still not be entirely above
suspicion on a cyclical trend basis, given my admittedly conservative reading. I do not
intend this as a bearish comment on the chart because there may just be sufficient momentum
in the current rally to bring the SPX above 1475 by year's end.
The reality here could well be that very short term fundamental factors could be the key to
seeing an extension of the rally through 12/31/12. My weekly cyclical fundamental indicator
has reversed nicely to the positive side, and, as of this writing, all is not lost yet regarding
the avoidance of heading over the fiscal cliff. By the same token, you have to keep in mind
that deals can get blown up in the 11th hour, and that even if effective compromises are
struck, investors and traders may not like the results very much.
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