The S&P 500 (ETF Proxy – AMEX:SPY) is grinding higher on lower levels of bullish power. A reversal is likely to begin forming, but our forecast is that this reversal will take the form of a multi-wave reversal pattern. We are staying on the sidelines in this index while we wait for this price confirmation to show itself on the daily chart.
Gilead Sciences (NASDAQ:GILD) has been “surfing” off the top of the green zone for several weeks. Price has now broken above the 50sma (Orange line) and should begin to accelerate to the upside. This week will be a critical one for this positon, if price does not rally substantially this week, it would be a signal of failure and would indicate that taking scratch profits is prudent before the week is out.
Genworth Financial (NYSE:GNW) has formed a powerful bottom on its daily chart, and is beginning to accelerate to the upside. It has formed a bullish pennant which should attract buyers to this market in the week to come. The explosive nature of this bottoming pattern allows us to forecast a profit target just below the $4 per share level.