The S&P 500 has finally broken out of its 2330 to 2400 range and the 2400 level should now act as support for any pullback, according to Ron Meisels at Phases & Cycles.
Meisels says the key levels to watch out for are:
2500: Achievement of this level would mean an acceleration of the uptrend
2400: A fall below this level would indicate the failure of the recent upside breakout
2300: A fall below this level would indicate a more major breakdown of the trend channel, albeit the 200-day moving average just below the channel at 2280 should provide further support.
In summary, Meisels thinks the S&P 500 has met its first test by breaking out above 2400. He says the next text is to stay above 2400 and push the breakout higher with more stocks participating. If that happens, the index is very likely to reach 2500.
Read the full report.