S and P Trend Bullish Flag Breakout

Salutations my buddy stock trading warriors. We might be at the birth of a new major S & P trend higher.

What?

Whose bong am I toking from to say that with so many Americans being jobless, banks being closed down, and housing construction taking a double decline to the downside?

Terrific question. It does appear out of the question provided you are a one-dimensional life form living in the here and now.

However you are greater than that. You were bestowed the capacity to see in your mind's eye yourself stock trading in the future. That higher level of thinking is something that separates you from other beasts and micro-organisms that can only think in the here and now. Though I confess it's not as awesome as Stephen Hawking time travel, it can make you a great deal of dinero.

One of the most tricky lessons for amateur stock traders to take hold of is that the stock market is the future of the economy anywhere from 4 to 8 months. In other terminology, all the movement happening on the stock market right now is a wager on the place we believe the economy will be 9 months from now. The stock market is telling us that in 9 months from now, the unemployment rate will be lower, banks will no longer be failing, and home construction will pick up. The earnings season we just finished verified that with 69% of all companies posting earnings increases from the second quarter of 2009.

The previous week I wrote about how, with the downtrend channel breakout, we do not know what new channel or chart pattern will appear since we don't have enough chart data so far. Currently with 1 week more of data, and zooming out on the chart to look at the bigger chart pattern, a archetype jumps off the chart.

The S&P 500 has finished a Bullish Flag breakout.

Now bears and gold insects will squabble about the formation and proclaim that not enough volume is present for this to be a bona fide breakout but this is just not accurate. If you go back and study the preceding Bullish Flag breakout we had on the S&P 500, you can see that the volume that has accompanied this breakout is over 24% more!

The Bullish Flag was a great 38.2% Fibonacci retracement of the bull move that started in March of 2009. A 38.2% retracement is a great retracement for a bull run.

I am upgrading the S&P 500, Nasdaq, and Dow to that of uptrend.