Indices Have Higher to Climb

Does the S&P 500 have higher to climb? It appears so.

The pattern carved out since last Tuesday's (2/7) pivot low at 1253.61 argues, optimally, that the low ended all or part of the corrective process off of the 1/11 high at 1294.90. All of the action from the 2/7 low appears to represent a recovery rally phase -- an incomplete recovery rally phase -- that has higher to climb to retest the 2/7 high at 1274.56, if not the 1280 area in the upcoming hours and days.

As long as the series of higher lows from the 2/7 remain intact and viable, I will have no reason to alter my optimal outlook.

Although the DJIA is holding up better than the other major indices, the blue chip index still cannot seem to hurdle key resistance at 10,940/50 to break out of its sideways pattern off of the Jan 11 high at 11,046.

The price structure is stuck between 10,950 on the high side and 10,835/820 on the low side. Whichever side of the range is broken should trigger acceleration in the direction of the breakout.

Right now my work continues to look for an upside resolution, which if accurate should trigger a thrust to retest the Jan high at 11,046.

While equities are looking up, precious metals in general, and Newmont Mining (NEM) in particular continue to correct their prior powerful upmoves. NEM is made new reaction lows today, getting as low as 53.21, before closing at 54.09.

It remains on course to press into my preferred corrective target zone at 53.30-52.40 prior to the next rally effort.

We will be looking for some sort of technical upside reversal signal in the $53-$50 target zone in the aftermath of a 20% pullback.

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