The S&P 500's "Slow Creeper Trend" and What to Expect Going Forward

Today showed another example of the theme I've been highlighting - literally - on the blog, showing multi-day rallies in the S&P 500.  Today confirms that we are in yet another ‘highlighted zone' as has been the cycle of the past.

Let's take a look at these regions, the present chart, and what to expect going forward.

First, I'm using two new tools that I don't often show on the blog, and that's because they are giving us hidden bullish strength signals.

The first is the "Accumulation/Distribution" volume-based indicator, and then the OBV or "On-Balance Volume" (also a volume-based indicator).

Without delving too deeply on these, I wanted to show that both of these indicators are making new highs above their early January 2010 peak while the price of the S&P 500 Index is not - that is a ‘hidden' sign of strength that forecasts higher prices... like those we are seeing now.  It suggests that price could continue to test if not rise above the 2010 peak of 1,150.

With that ‘futuristic' comment said, let's look back at the highlighted regions which represent "short-squeezes" and multi-day rallies (without stopping) that have often triggered after a bearish signal (such as a break of a moving average) occurred.

See the following posts for more insights into these highlighted regions:

The 12 Failed Sell Signals on the S&P 500

"Recent Bull Traps and Sell-offs in the S&P 500?

"Recent Failed Sell Signals and Short Squeezes in the SPY

If History Repeats, Will it Mean New Highs for S&P 500?

The following posts are excellent examples of how to take current market "character" and forecast the potential future:

"New S&P 500 Highs Forecast by Fifth Sprung Bear Trap"

"Could S&P 500 be Building Yet Another Power Move?"

There have now been six examples prior to the current move that have unfolded almost identically - with anywhere from four to nine straight days of advances in the broader market, despite any bearish commentary or signals.

The current situation places that number at seven, as seen in the highlighted regions above.

What is the implication?

This is the reality of the current market in which we trade, which has a hidden (although it's now blatantly obvious) bullish undercurrent/bias despite whatever the bears/sellers throw at it.

And in fact, the rallies are perpetuated in part by the short-covering ('popped stops') of the bears.

Take some time to study these examples and use the knowledge to your advantage as long as history continues to repeat itself.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter:  http://twitter.com/afraidtotrade