Although the S&P 500 and Nasdaq did fall out of their 4-year channels as I focused on in my previous article, their 6-year channels saved the day and are showing strong support for a continued move higher through year end. Taking a look at the S&P and Nasdaq charts below, we can see that the S&P's double bottom was fiercely supported twice at the lower line of its 6-year uphill red channel.
click on image to enlarge
The Nasdaq quickly bounced well away from the lower line of its 6-year uphill red channel. The precision and ferocity of support at the lower line of these 6-year uphill channels contradict all of the calls of the past couple of months that the bull market has ended and the bear market has begun. The bear market will not begin until the S&P and Nasdaq fall below the lower lines of these 6-year channels then have a back test of the underside of the lines fail and then start dropping again. For the time being, however, the trend is still upward.
Trade well my friends
Alan
