Bullish 4th Quarter?

Despite the negative headlines, I wanted to take a look at the bull case in real terms. That is, "What does the bullish case look like on a chart of the S&P 500?" Below is a QUARTERLY chart of the S&P 500 with hypothetical data added for the last quarter of 2009. The required level for the bullish case is 1175. This would return the average above its long-term MA.


How would it happen? Would inflation break out? Would gold break out? Would employment start to pick up? Would housing move back up?
Who knows? The market will tell us in time, if we are patient. I actually think that the bearish start to the quarter gives the bulls the edge. Typically, the market gets marked down at the beginning of any period only to be marked up at the end. That is the nature of the market, especially on the shorter term time frames. Does it hold up on a quarterly basis? I'm not sure, but we will see soon enough. Meanwhile, keep 1175 in the back of your mind. That is where we need to be by Dec. 31st. If not, even if we are higher than now (which we may very well be), then 2010 could bring trouble.