That level is channel resistance on the primary rising channel from the October 2011 low. That is a well formed channel and channels don't overthrow like wedges. A break up through that channel resistance, currently in the 1950 area, could be a false breakout, though even those are unusual on channels, or it could mean that this bull move from the October 2011 is entering a parabolic bubble phase, which seems unlikely for a number of reasons, would need to be considered seriously if that channel were to break with confidence. SPX weekly chart -primary channel:
- Immediate reversal back down to wedge support and a possible break downwards
- Bearish overthrow before reversal back down to most likely break down from the rising wedge
- The pinocchio at rising support was a bullish underthrow and the wedge breaks up with a target in the 2030 area.
The chart to watch here to see which way this will go is the SPX 15min chart setup. That is obviously leaning strongly towards a significant high under 1950, but on a conviction break above would target the 2030 area, a target which would at that stage be supported by the larger rising wedge cum channel setup from the 1737 low. I'm leaning towards a downside resolution but the signals are now mixed, and I'm wondering whether the very strong channel resistance in the 1950 area might be broken. If it is then we may not see a decent summer retracement this year.
I'll be posting updated TLT and AAPL charts on twitter as I've used my chart limit today on equity index charts. Everyone have a great weekend. :-)