(The Technical Analyst) The current correction in the S&P 500 will set the stage for its next leg upwards and what will be its tenth year in a bull market, according to Ron Meisels at Phases & Cycles. Meisels points out that the current rally has succeeded in recouping more than two-thirds of its initial decline, but he cautions the recent quick run-up could be soon over as short-term overbought conditions prevail. He thinks however that another push higher will follow and that if it can move above 2750 then the index should be able to continue into the high 2700s or even low 2800s. If the S&P starts to close in on the all-time high, he thinks bullish optimism will grow further.
Overall, Meisels says the position of the S&P relative to its 50-day and 200-day moving average indicates the bull market is still thriving. However, his immediate approach is to wait and see how far the current recovery rally can climb since he thinks it could stall at any time and that a good buying opportunity should appear when the correction is finally complete.
