Third Bullish Signal - How Long Do Market Rallies Last Afterwards?

SmartReversals
06-12

In April, I highlighted rare bullish signals that occurred during that month. Both signals have since formed the core of my bullish market stance, as the events studied have consistently preceded "quick-buy-the-dip" seasons, much like the one we've witnessed.

Two months have now passed since the market bottomed, beginning the second week of April, and it has since achieved a V-shaped bounce. As of today, the $S&P 500(.SPX)$ has cumulatively bounced 25%, the $NASDAQ 100(NDX)$ 33%, Small Caps $iShares Russell 2000 ETF(IWM)$ 25%, the $Dow Jones(.DJI)$ 18%, and the Semiconductors ETF $VanEck Semiconductor ETF(SMH)$ 56%.

Considering the V-shaped bounce mentioned, the cumulated 20%+ gain so far in a short period of time, and the potential top formation that the major indicators are suggesting, as the NDX, which reversed with precision from the immediate bullish target for the week $22,036 shared in the latest Weekly Compass.

Be mindful of the support and resistance levels that are contained in the volume shelf highlighted by the black double-arrow, where the 20DMA is also located, and let’s be mindful of the imminent bullish crossover between 50 and 200 moving averages.

The bearish divergence with RSI and the latest candle suggest the 5 moving average could be penetrated tomorrow; anyway the central level for the week is $21,617.7, so nothing is confirmed until that level is breached.

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