Resolution of defined technical pattern will determine next durable trend direction. Once again, continue to buy weakness until layers of moving average support are violated.
Equity markets begin the week pressing upon upper level resistance. Our internal quantitative analysis indicates that the broad market (SPX complex) is entering overbought price zones as well. A pause to digest gains and test lower support would provide the best opportunity to capture the upper boundary of a defined "Raising Wedge" technical pattern on the daily chart.
As long as layers of moving average support are not violated, continue to use weakness as buying opportunities. Rich Posson's cycle analysis suggests that equity indices should continue higher over the intermediate term. If the upper boundary of the Rising Wedge pattern is captured, SPX should extend to the 2,180 price zone using a conservative price projection.
Longer term charts (i.e., the weekly chart below) provide additional clues. A higher close at the end of the week captures descending trendline resistance as well. Any throwback tests of lower ascending moving average support offers further buying opportunities.
Unless support levels are violated (especially the daily 200 day moving average), the current rally and upper level targets remain intact.