The S&P has now separated from the 136 level where the market has now spent 14 weeks of time since the low last fall under the 108 level. What we can now assume is that 136 is the key support level and we should not see a violation
of that key support level . I believe it is logical to see some kind of a retest of 136, but not a break.

The market now has 13 more weeks to rally from this formation and there are numerous upside technical measurements.

Method#1. 108 to 136 = 28 pts added to 136 = 164 target.
Method#2. 142 peak down to 127 low, added to 142 peak = 157 target.
Time Method#1. 14 weeks of rally starting from the previous week. This is week 2.

Note that the market is likely to test support around the 136 level, but I believe it will hold. If the SPY retreats and 135 trades, then all bets are off for this projection.

There is a lot of money flowing OUT of default-risk-free Treasuries and this is in part why I think the market is lifting despite the obvious headlines that are negative.

Cheers to all.

Tim 5:45PM EST, Aug 14, 2012

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