S&P500 makes a new All-time high...Is 1750 potentially next?

A little over a month ago we stated that “the S&P500 appears to have formed a Positive Reversal, whereby weekly RSI made a lower low but price made a higher low…this bullish development suggests we could see a retest of the All-time high at 1709.67 and if this gives way it could open the door to a potential test of the positive reversal measured move objective around 1750 over the coming weeks.”

Technically, since our last update the S&P500 formed another higher high & higher low (the definition of an uptrend) and last week it formed a Hammer pattern – Characteristically a bullish reversal formation. After a deal was reached last night to keep the US government funded through Jan. 15th and raise the debt ceiling until Feb. 7th, US equities opened lower on the day. However, as the session wore on it became more apparent that due to the fiscal uncertainty presented over the past few weeks and the potential shadow this could cast over the US for the next 3 months, that it’s increasingly unlikely the Fed will begin to Taper QE in 2013. Interestingly, this sentiment was also expressed by a few members on the FOMC earlier today.
Key Fed Bullets:

• Fisher: Hard to argue now to change the course of Fed’s monetary policy
• Fisher: Fiscal shenanigans have `swamped' QE Taper prospects
• Evans: QE Tapering postponed after data needed to make a decision delayed due to US government shutdown
• Kocherlakota: Fed should aim for faster drop in unemployment, more stimulus may be needed
• Kocherlakota: Inflation above 2% shouldn’t stop Fed QE

As a result, the S&P500 rallied by 11.61 points today and broke to a new All-time high, above 1729.86 previously. Furthermore, this potentially places the S&P500 one step closer to achieving the Positive Reversal’s measured move objective of 1750 over the next few days or weeks.

Source: Forex.com

17.10.2013