LAST WEEK WAS PIVOTAL for the stock market as the major indexes ignored preliminary technical breakdowns and shrugged off bad news. Indeed, even for a bear such as me, the writing was on the wall as bearish reversal patterns changed into bullish continuation patterns (see Getting Technical, “Why the Bulls Just Won’t Die,” May 28).
With Monday’s big stock-market gains — at least as of 3 p.m. ET — it does look as if the bulls are not only alive but well, at least in the short-term.
Of course, the question is just how long the rally can keep going. The short answer is that there is still some room on the upside.
Previously, the Standard & Poor’s 500 peaked at 930 in round numbers on May 8, (see Chart 1). At a minimum, Monday’s surge broke that resistance level to the upside and ended a month-long trading range. (The S&P 5000 was trading at 943 as of 3 p.m. Monday.)
More Room for the Market Bulls to Roam? – Michael Kahn, Barron’s
