Wednesday, July 10, 2013

The S&P 500 Could Hit 2000 Before Year End

by Greg Harmon

Back in the beginning of June the broad market was pulling back. There was oodles of debating around whether this was the big one that Roubini, Faber and Prechter have been calling for since, well, forever, just a run of the mill but painful 20% correction, or a modest pullback that should be welcomed, as Ralph Acampora has put it. Then I wrote about the possibility that it could be a big pullback but that price action was suggesting maybe not. The 1593 level in the S&P 500 ($SPX) was the low at the time and I pointed to the 1553 and 1536 levels as important downside support levels. It turned out that the 1553 level held and the market has been reversing from there. Fast forward to July 10th, a month later,


and the market is starting to look very solidly like it wants to go higher. The chart above of the S&P 500 shows the pullback as a bearish Shark Harmonic with a Potential Reversal Zone at either 1677 or, a new high, 1699. The full Shark is then seen as a retracement or pause in an AB=CD pattern. That has a target of 1903 and timing of about year end. But these often extend to where CD = 127% of AB, like in the 4 thrusts that drove the market from 1343 to the high at 1687. In that case the target would be about 2000 on the S&P 500.

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