Don’t bet against this market — it’s breaking out

Posted by Lawrence McMillan

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Late last week, the Standard & Poor’s 500 Index finally exceeded what had been firm resistance at 1,850 and closed at new all-time highs for two days in a row (Thursday and Friday).

Normally, a two-day close is enough to solidify and confirm a breakout. However, the Russians threw a bit of a monkey wrench into the mix by stirring up problems with Ukraine. That caused the S&P 500  to tumble back below the 1,850 breakout level — which quickly begged the question, “Was this a false breakout?”

Today’s action has clearly shown that it was not a false breakout, but it was a fair question from yesterday’s point of view. Basically, the broad market is still operating off the double buy signals from the VIX “spike peak” trading system and the “modified Bollinger Band” trading system generated in early February. They’re marked on the SPX chart below. – view chart & more commentary HERE