Did The S&P 500 Just Begin A Huge Technical Breakout?

The S&P 500’s modest 0.4 percent mid-day gain on Tuesday may not seem like anything special on the surface, but a look at the index’s chart shows why it may be part of the biggest move the market has made in months.

After Monday’s close represented a higher close than the market’s April peak, Tuesday’s follow-up now has the S&P 500 trading higher than even its November peak and reaching heights not seen in nearly a year.

This new potential breakout comes as particularly good news to market technicians that had feared that the pullbacks in January and February, which dipped below the troughs in August and September, were signs that the S&P 500 had transitioned into a bear market.

Assuming that Tuesday’s move survives to the close, bulls will have yet another piece of evidence that the seven-year-old bull market is not dead just yet.

Related Link: The Days Of Easy Stock Market Gains May Be Over For Now

In fact, in the near term, the breakout could even potentially trigger a short squeeze among market technicians that were betting on another imminent pullback to the 1800 level or below.

For now, bulls will be watching the 2134 all-time high for confirmation that the rally is back on after nearly a year of volatile sideways consolidation.

Despite a historic sell-off to open the year, the SPDR S&P 500 ETF Trust SPY is now up 4.1 percent in 2016.

Disclosure: The author holds no position in the stocks mentioned.