I ended my post yesterday by saying ‘See you at 7300.’ I guess I was wrong and I should have said ‘See you at 7400’ instead.

As usual, SPX continued the upside momentum and rallied over 100 points today. The entire day was a consistent, orderly push higher and we closed essentially at the highs of the day. 7300 was broken without any sort of a fight, just as the previous levels before it.

If you recall from a post a few weeks ago when we first broke 7000, I highlighted the price action from last June when SPX broke 6000, and then 6100, 6200, 6300 and 6400 all within a few weeks. I posed a question asking if that was possible again once 7000 was broken. The question has been answered, and it is an undeniable yes.

We haven’t technically broken 7400 yet, but we’re 35 points away and honestly we probably get there tomorrow.

The daily chart has once again gone vertical and we are now outside of the expected move. 7400 is within an easy reach and the candle today is so bullish, that we should expect follow through in the coming days. SPX has rallied over 1000 points in 6 weeks. Not much to analyze beyond that. I think that statement speaks for itself.

The mirror images between last April/May and this April/May are quite amusing. I think we can expect June and July to also be the same.

If you do some simple calculus and calculate the current trajectory of SPX, given the magnitude of the move we have just had, and if SPX maintained the current velocity, we would be at 9000 by early July.

Obviously I am joking about that as a realistic target, but the numbers add up and for you calculus fans out there, you can do a little math for yourself and see that the math actually checks out. An object in motion stays in motion…

SPX continues to gap higher and run away, which really shows the strength of the upside momentum and the sentiment behind it. When momentum and sentiment align at extremes, this is the type of price action you get. We have rallied ~200 points from the lows on Monday and nearly 260 points from the lows on last Wednesday, exactly 1 week ago. We are up 100 points from the previous all time high set yesterday.

The downside key levels are where dip buyers decide to step in, and the upside key levels are non existent.

The signal has been very clearly bullish, no matter how ridiculous you think this move is. It likely isn’t stopping any time soon, because there simply is no reason for it to stop. If a reason pops up, dip buyers will have stepped in making any sort of news or whatever completely irrelevant.

I may sound sarcastic but I am actually not trying to be. The market is irrational, but it is not wrong. Read the price action and interpret this market for exactly what it is – a raging bull market.

If there is a dip, buy it.

See you at 7500.

PS: VIX closed up 1 penny, literally everything is rallying. 🙂