S&P 500 Completes Bullish Triangle

Although the rally from the March lows has looked a little tired recently, more evidence accumulates that the market's technical foundation actually continues to improve.

Indeed, the S&P 500 has just completed a bullish triangle at 865, this coming after its overall trend and monthly momentum also both flipped to the upside earlier this month.

Meanwhile the NASDAQ is accelerating to the upside; it has been the leader from the

bottom and will be further juiced with a break at 1700.

With the average stock currently 23% overbought (vs. the 64% oversold reading in early March), stocks have obviously moved a long way in just seven weeks. While it is certainly reasonable to think this short-term overbought condition could lead to a short, shallow pullback soon, particularly in the face of continuing earnings reporting and the approach of the seasonally unfavorable period, investors should be turning increasingly constructive based on these longer-term technical improvements.

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