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This is an update of a chart I presented in the article S&P 500 Parameters are Well Defined. The updated chart below illustrates how the breakout of the converging resistance and support areas described in the previous article happened sooner rather than later. The 1350 support did indeed hold, while the first minor resistance area of 1420 has been breached. 1420 should now serve as minor support; unless the market does a pop-and-drop (e.g. market pops above an area briefly and then drops back below it). Support from the bullish channel trend-line is now in the 1370 area.
The next significant resistance area is 1475, which was established back in September and represents the high of the market's cyclical rebound from the 2009 low. Presently, the market seems to be dismissing any difficulties from the fiscal cliff; and while negotiations continue, the market is creeping higher and is setting itself up for a possible retest of the 1475 area. The rally has come on relatively light volume, which makes one wonder what might happen if the market perceives any fiscal cliff clarity as being bullish.
There is one final thought that I'd like to add. This is a very unusual time, and seems to be one in which governmental policy or lack thereof is more apt than usual to move markets dramatically.
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