S&P Composite:1444 - Expected to rise to 1515/1560 over the coming months

The overall chart structure is bullish. Near term, a challenge of resistance at 1461 from the recent peak seems likely. This area is not expected to impede progress for long and it currently seems likely that the market will rise to challenge major resistance at 1515/1560 over the coming months.

The medium / longer term trend is clearly bullish right now and the late February / early March retreat appears to have been no more than a healthy correction within this trend. Trading action since the March low has been constructive and a new short term uptrend appears to be emerging. Having just cleared last month’s minor high, the S&P now looks set to extend its recovery up to challenge relatively minor resistance from this year’s peak at 1461.

An appraisal of cyclical factors leads me to believe that the late Feb / March correction coincided with a medium term cycle low and that a new medium term bullish cyclical phase has just begun. Increasingly, it seems likely that this will help underpin a challenge of major resistance from the all time highs at 1515/1560 over the next few months. Readings from momentum indicators, coupled with the healthy overall medium term chart structure lead me to believe that resistance from this year’s high at 1461 will not prove to be a serious impediment to progress and that we will see this area cleared before the month is out. A closing break above 1461 would reassert the prevailing medium / longer term uptrend and indicate that further progress is imminent.

As mentioned above, the overall chart structure currently looks strong enough to support a challenge of the all time highs over the next few months. However, it is worth bearing in mind that as a market approaches a major resistance area such as this, it is difficult to be precise when it comes to determining lesser resistance areas – i.e. the points on the chart from which temporary corrections occur.

Initial minor support stands at 1438/1434. A close beneath here would suggest vulnerability to a drop back to 1426/1420. However, it would require a closing break beneath the latter area to warn that the near term uptrend is losing momentum. Beneath 1420, more substantial support exists in the range 1411/1408. The chart structure would deteriorate markedly on a closing break beneath 1408.

Support: 1438/1434(minor), 1426/1420(minor), 1411/1408(fairly minor) 1384/1383(minor), 1374/1373.

Resistance: 1461(fairly minor), 1507/1509(possible), 1515/1560(major).