Are We There Yet?

The question being asked in the market is “Are we there yet?” Instead of “How high can it go?” Skepticism still abound on how can this market keep going up. From the inverted H&S measured move, it says there is still much higher ground to go. But for the near term, here is a pattern one might want to keep an eye on to get some intermediate term target, the “Bull Flag”. It might not be as clear to see this pattern on the daily price chart, but the weekly price chart does show this pattern a bit clearer for the DJIA, SP500, and the Nasdaq 100.

In the short term, we are coming up to the magical/psychological resistance level of 10,000 for the DJIA and 1,100 for the SP500. These psychological resistance levels could trap more bears into this buy-the-dip rally. This could be the catalyst that will force those skeptical bears to give up and go long. And that will play right into setting up the October selloff (remember Black Monday?).

Here are the weekly charts showing the bull flag and the measured move. Click on the chart to get a larger image.








For those of you that trade the Spider and the Qs, here are the charts for these two ETF showing the bull flag measured move target level.






Be careful, although September’s performance has defied those talking heads about how historically September been a bad month for the market. There still can be some surprises lurking that will turn this market upside down. Don’t get complacent! Watch those technical levels, don't forget to mention where you’ve seen them.