US stocks surged sharply overnight, with S&P 500 and DOW closing at new record highs. S&P 500 rose 1.44% or 58.04 to 4077.91. It’s now close to 61.8% projection of 2191.86 to 3588.11 from 3233.94 at 4096.82. Based on current momentum, this projection is more likely to be taken out decisively than not. In that case, sustained trading above 4096.82 will confirm strong underlying medium term momentum, and pave the way to 100% projection at 4630.19. In any case, for now, outlook will stay bullish as long as 3853.50 support holds.
DOW has already taken out equivalent level, 61.8% projection of 18213.65 to 29199.35 from 26143.77 at 32932.93. S&P 500’s reaction to 4096.82 would help double confirm DOW’s medium term upside momentum. We’re looking at 100% projection at 37129.47 as next target. In any case, DOW will stay bullish as long as 32071.41 support holds.