For the last two months we were witnessing the bearish correction on the American stocks but the party is back on and there is only one side of the market that matters now: buyers. This fundamental relief rally is additionally supported by the technical analysis, which does not happen very often.
We are not the biggest fans of going long on the indexes. Mostly due the fact that we do not believe in this run for higher and higher levels with the current global surroundings. That being said we still need to listen to the price and respect the price movements. From the technical point of view, the situation is very good for the demand and it looks that we are all ready for a new wave up.
The post election movement happened right in time. Since the beginning of May, we were closed inside the wedge (blue, a trend continuation pattern) and waiting for bigger attractions. Price was slowly going lower and lower, but still without any unusual bearish power. We broke the mid-term up trendline (red), but with such a steep trends it is nothing special.
The wedge continued and we were waiting for a breakout which happened today, driven entirely by the results of the first round of the elections in France. This triggers the strong buy signal here and leaves sellers without any arguments. The most probable scenario for the next few days is the SP 500 going higher.