4 signs this bounce is about to get real

• Posted by Greg Harmon
• on February 26th, 2016

2016 has been a horrible year for stocks over the first two months. Equities are off too much, oil keeps falling and bond yields are crashing. This has been the worst start to a year ever for stocks. It seemed like there might be a reversal back at the end if January but that petered out. But with just two days left to go in February, the markets have pulled out of a double bottom and are cracking that early January resistance. This shit is about to get real.

The chart below is giving 4 signs that the latest leg higher in the S&P 500 ($SPY) may have a lot of room left to run. The first is the break of that dotted resistance line Thursday. This is a key to another sign, the “W”. You can see how the last “W” played out from august to November. This one is tighter and looks to play out to about 207.50 over the next two weeks.

The move Thursday also brought the SPY over its 20 day SMA for the first time this year. Momentum is also with the markets. The RSI is on the verge of a move into the bullish zone while the MACD is about to turn positive. Both are rising and support more upside price action.

Teh SPY could certainly fall back again and fizzle out. But the move Thursday was significant. This shit just got real.

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