If you blinked, you may have missed it, but on Friday, the S & P 500 hit 6,099.97 – the highest level in its history. That’s as close to 6,100 the index could have gotten without actually crossing it. Why is this so important? Because it’s been our long-term price target since the middle of January. It took nearly 11 months to achieve the objective, but it was well worth the wait. Hindsight always is 20/20, so this may not seem too outlandish now that it has happened. However, it was never a guarantee; nothing is in financial markets. Let’s remember how things looked and felt back in January when the S & P 500 first approached the 4,800 zone. The index was up 37% from the 2022 low; and it had just logged gains in 10 of 11 weeks from the 2023 low point. Also, the index was staring directly at its former high point from late 2021, right before the 2022 bear market commenced. Given all of that, there were plenty of naysayers. The very next week, though, the benchmark broke through that area and made a new all-time high. The triggered the big bullish pattern. But even after that, we needed more confirmation. Why? All technical breakouts are tentative until we see upside follow through. The S & P 500 rallied for the next three weeks, which created a necessary cushion and gave us additional confidence that it could be achieved. So, what changes now that 6,100 has been hit? From our perspective, not much. The same steps will need to be followed for this uptrend to continue: Hold support Upside follow through Log a higher low Form a bullish pattern Break out Hit the upside target Repeat steps 3-6 Step number seven is the most important one, of course – repeating the process – and it’s the blueprint that the market has adhered to since bottoming in October 2022. There have been a handful of volatile downturns along the way, but each one ultimately created the next bullish formation and upside target. Just how important has it been for the S & P 500 to keep forming and breaking out of bullish patterns? Of the 10 pattern targets that have been hit since 2023, 9 of them have been acquired after the big breakout in January. In other words, we wouldn’t have come close to 6,100 if the smaller formations didn’t work. We’re not here to make hollow predictions, but here’s one promise. We’ll continue to use the price action and classical pattern work to dictate our market stance. That’s true for bull markets and bear markets. The latter seems like an impossibility at this stage. We won’t nail the top, but we never try to do that… Relying on traditional overbought/indicators in attempting to call the end of this run just hasn’t worked. As we discuss nearly every day at CappThesis, that’s because bull markets have very different characteristics than bear markets. One such trait is that in bull markets, breakouts work, and breakdowns don’t. Once that changes, the trend will change, but not before. Want more? Here’s a YouTube video we recorded this week about S & P 500 6,100. -Frank Cappelleri Founder: https://cappthesis.com DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
