SPX Weekly Chart 3 1/2-Year Upward Channel

The SPX weekly chart is in a three and one-half year upward channel. QE1 saved the markets in early 2009 and the intial bullish rally in 2009 established the channel boundaries. In summer 2010, markets were crumbling thru disinflation into deflation and ready to roll over the falls so Chairman Bernnke felt he had to step in with QE2 to save the day. That money pump took markets up into the early 2011 high when copper, commodities and financials rolled over taking the broad markets lower. The July 2011 waterfall crash occurred directly thereafter. This past summer, the Fed reached into the magician's hat once again and pulled out the Operation Twist program, plus keeping rates low thru 2014, plus rumors of housing stimulus plans and other money pumping talk. That helped price come back up to the bottom rail but could not get it up inside the safety of the channel, until the ECB announced LTRO 1and 2 that now has the SPX back up and inside the channel.

A back kiss should have occurred after price punched up thru the bottom rail so that still should occur which would require a pull back to 1350-ish. At that time price will determine if it wants to maintain the channel (with price bouncing up off the bottom rail) of if the 3 1/2 year rally ends (price collapses down thru the bottom rail). This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here or any links connected to this information. Consult your financial advisor before making any investment decision.