S&P500 Cup and Handle paid off. Now brace for Xmas rally.

The S&P500 index (SPX) fulfilled our previous Cup and Handle (C&H) pattern, as even though it had a week closing below the 1W MA50 (blue trend-line), it eventually bottomed and has since been on a 3-week rebound that broke above the Handle, turning the 1D MA50 (red trend-line) into a Support again.

Perhaps the strongest technical development of the week is the emerging formation of a Bullish Cross on the 1W MACD. Historically those are formed in the middle of strong rallies, even during a Bear Cycle correction (such as on July 18 2022). Even though a 1 week correction similar to the October 31 2022 1W candle is possible, we expect a new All Time High (ATH) at 4900 (Target 2) at least, as every rally since the October 10 2022 market bottom, has completed at least a +20.19% rise.

Even on the short-term, we expect a 'Christmas rally' to test the bottom of the ATH Zone at 4700 by the end of December, assuming the 1D MA50 of course supports.

Our longer term perspective has the psychological 5000 target in frame as it is slightly below the 1.5 Fibonacci extension from the July 24 High. This projection is made based on that July 24 High itself, which was been on the 1.5 Fib extension from the January 30 High.

Are you looking for a 1 week pull-back to buy or you are already on board for a 'Santa rally'?

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