After the fed we are heading to a new max

 After last weeks FED meeting the market reacted very positive to it initiating a new upwards rally. (read this post for more FED info.) So what can we expect for this week? Lets check the graph:

S&P500 Index 22-03-2015

The first thing that we can see is that the market its again in an up trend. This last months, after october and november rally the market stoped to do a consolidation (in the purple circle). But thats not the situation anymore, we are out of that lateral consolidation. In addition to this, is very important to notice that now we have a new trend line that the market seems to have been ‘riding’ since october minimun, we should keep an eye on that in case of correction. Its from this line that we have started a new upwards wave. But can this new wave keep going higher?

S&P500 Index 22-03-2015 osci

In this graph i’ve added the main oscillators, a slow one (TRIX), a standard RSI and a quick stochastic. As you can see in RSI there is still space for the market to keep going up before it reaches too high overbought zones and even stochastic still has lots of space. Also TRIX is now giving a buy signal which is normally a very slow but strong confirmation signal.

It’s also important to remember that for the past couple of years we’ve been in a very positive trend, this means that after any correction we’ve seen the market reach new maximuns. So why would we expect it to be different?

In conclusion, the market is treding upwards again. It has broken the consolidation zone and it has a new trend line that it’s supporting it. Oscillators confirm the actual move and give enough space for the market to keep going up. For this I expect the market to keep going up until a target around 2135 and 2150.

We should be long riding the move and then jump out once we are close to 2150, because there is a resistance there or once we see divergences appearing in our oscillators.

Good luck and good week!!