SPY: Bull Market Seems Secure


In a post-Brexit article I wrote back in July I concluded that we were in a cyclical bull market that launched off the February lows. At the time there had been a decisive breakout above important resistance at about SPY 208.00. From there the campaign-burdened market meandered sideways until testing the support in early-November. At that point the bull market resumed, and has gained +27% since its February launch. There was another breakout in November, followed by a retest of support. Last week the rally resumed with great exuberance, showing the bull to be fully in command.

Let's look at a broader picture to emphasize the positive longer-term context. The weekly chart below shows the entire  secular bull market that began from the early-2009 lows. There was a cyclical bear market in 2011, then a continuation pattern (cyclical bear market substitute?) between late-2014 and mid-2016. The July breakout established that a new cyclical bull market began in February, and that the secular bull market still rules. Being less than a year old, the current cyclical bull is relatively young and could easily last a few more years.

CONCLUSION: As future overbought conditions and negative divergences develop, as they always do, pauses and corrections to digest market gains are inevitable; however, we should keep in mind that we are currently in a cyclical bull market that is layered on top of a secular bull market. That is about as positive as it gets. 

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Technical Analysis is a windsock, not a crystal ball.

Happy Charting!
- Carl

Carl Swenlin
About the author: is a veteran technical analyst who has been actively engaged in market analysis since 1981. A pioneer in the creation of online technical resources, he was president and founder of, one of the premier market timing and technical analysis websites on the web. DecisionPoint specializes in stock market indicators and charting. Since DecisionPoint merged with in 2013, Carl has served a consulting technical analyst and blog contributor. Learn More
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