The S&P 500 (ETF Proxy – AMEX:SPY) is rising after forming a double bottom. Bullish power has surged this week, and so we are forecasting a rally up into the blue box shown here, with about a 35% chance to push up higher than $200 into the $205 area. Once this bull cycles wears itself out, we will be looking for aggressive short exposure as that will be the confirmation of a deep timeframe reversal which will trigger a more serious and sustained bear market.
Gilead Sciences (NASDAQ:GILD) has hit an area of support which has the potential to create a sustainable bottom. There is a small surge in bearish power that we are forecasting will take price down into the green zone, to form a higher low and thus confirm the bottom. The first profit target would be at the 50 SMA (Orange line), then depending on the power readings at the time we can update our ultimate price target someplace near the $100-$105 per share area.
The false breakout we predicted in McDonalds (NYSE:MCD) is building power for its next leg down. While the trend shift is building energy in the deeper timeframes, the daily power is waning. This means that a range may form before a more serious breakdown can occur. This indicates to us that it would be prudent to take partial profits as price reaches down into the area on the chart indicated in blue.
Bo Yoder
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