S&P 500 Trades In Upside Price Channel As It Nears Old All-time High

The DJIA closed the week of December 11, 2006 at a record high of 12,445.52 eclipsing the highs set in the 2000 price bubble. The Nasdaq Composite of technology stocks is up but far below its record high of over 5,000 in 2000. And the S&P 500, a broad market index, is at 1,427.09, which is near its 2000 high. So where does the stock market go from here?

Plotting the S&P 500 weekly closes on a logarithmic scale straightens the price series so you can see the multi-year upside price channel. The current upside prices are traveling just above the lower boundary of the price channel indicating that they may have further to go on the upside.

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Posted December 16, 2006.