Europe may not be done haggling over the details of the Greek bailout but, at least as far as Wall Street is concerned there's only one real question: Is there going to be an end of the year rally, or what?
Ryan Detrick, chief technical strategist at Schaeffer's Investment Research says yes! He has three good arguments for taking an upside shot:
1. Chart support: 1,220 on the S&P500 and 2,600 on the NASDAQ are as clearly defined support levels as you'll ever see. Pretty much every bull, including me, is using 1,220 as an entry point for at least a trade. You can dismiss charts all you want but I like to trade levels where I know I have company. Traders are buying 1,220 so far almost regardless of the news. That's bullish.
2. A reversal pattern: A student of market history, Detrick sees this bullish and rare setup unfolding: "When the Dow breaks down to a 2-month low then, 2-weeks later makes a two month high." Still with us? Good because this pattern has happened "only 5 times since 1990 and only 17 times since 1950." Markets have been higher 2-months after these trading setups more than 70% of the time.Read More »from 3 Reasons to Believe in a Santa Claus Rally