The long term trend remains up. Just as important, this week the intermediate term trend shifted up as well. Below is a chart of the weekly SPY. On Monday of this past week the market opened lower than where it closed the previous Friday. Early in the week the market sold off but beginning on Wednesday the market started to rally and had a very strong up day on Friday of this week to close above last Friday's close. This is VERY bullish price action and was also confirmed by the sentiment indicator that I look at.
CONCLUSION
Based on this week's price action the high of 173.60 is a high probability target. However, I think that caution is warranted. As bullish as this past week's price action was; the market is still very overextended to the up side. If I were out of the market 100% up until now, I would "dip my toes" back into the market with a small position and then monitor what happens when the September high of 173.60 is reached. Have a great weekend.
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