Selling was heavy last Wednesday, only 1 stock in the S&P 500 was up that day. I don’t like seeing days like that within a continuation pattern, but regardless, the market rallied on Thursday and Friday based on Italy and a PM for Greece, and good econ data. The Dow Jones Industrial Average even made it up above its 200-day moving average a third time from under it, in less than a month. So as the market continues, we’re nearing the apex of this consolidation and the final wave down (wave e). Because the market was rising before this pattern, the probability is high that we’ll breakout to the upside. That target of a triangle breakout is the distance of the base (about 60 pts). 60 points higher form here will bring us back towards the 1350 supply zone that rebuffed the market in July. That’s Piper’s target for the 4th quarter rally. A lot of the gyrations over the past two weeks have been caused by Europe and not earnings. Anything out of Europe can throw things out the window, but here’s the chart pattern thus far.
