Big Bull Trend by Leading Markets Testing Multi-year Support

12/15/2015 7:00 am EST

Focus: STRATEGIES

Gregory Harmon, CMT

Founder and President, Dragonfly Capital Management

Greg Harmon,of Dragonfly Capital, takes a technical look at the bull trend for two indices—both near a key test of support—and how the type of price action that takes place following the Fed's meeting Wednesday could determine a good deal of where stocks will be at the end of this year and the first six months of next year.

The big bull trend is near a key test of rising support. Below looks at the S&P 500 (SPX) and the DAX Index (Germany) over the past four years.

chart
Click to Enlarge

The power of the pattern reflects that the S&P 500 and DAX both remain inside of uniform rising channels. Despite weakness over the past few months, the trend remains up for both of these, with a key test very near.

The Fed rate announcement is to take place this week, near the traditional December seasonal low.

The type of price action that takes place this week, near rising support, could determine a good deal of where stocks will be at the end of this year and the first six months of next year.

It has paid to buy on support for the past few years, will it be different this time? Can Santa influence the markets at rising support this week?

Stay tuned friend, what takes place at this support channel has the potential to be a big deal for this big bull trend.

By Greg Harmon of Dragonfly Capital

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