Bullish breakout should drive SPX to 4060

Tuesday produced nearly a textbook breakout which not only exceeded late June and early July highs in $SPX, but also successfully exceeded 3-4 month downtrends for $SPX and $DJIA.  Seven of the 11 S&P Select SPDR ETF’s were higher by more than 3%, and volume was nearly 10/1 bullish on NYSE and NASDAQ, producing a “90% Up day” in volume.  Hourly charts show this breakout above the two former peaks of the recent one-month consolidation, which likely drives $SPX higher to 4050-60 near-term before some backing and filling into the final week of July.  However, the odds of a breakdown to new lows are growing slimmer by the minute, and I’m no longer confident that markets need to pull back to new low territory under 3636.  While sentiment and cycles had predicted a bottoming process and lows for US stocks between June and July, it seems that structural progress is now occurring, and breadth expansion could be finally beginning, which had been lacking on previous rally attempts.