S&P 500 Is Poised to Recover 50% of Losses: Technical Analysis

(Bloomberg) -- The Standard & Poor’s 500 Index has surged to within 1 percent of recouping half the plunge that followed its October 2007 record, a signal to some chart analysts that the steepest rally since the 1930s will continue. The measure has risen almost 434 points from a 12-year low of 676.53 in March on signs the worst economic slump since the Great Depression is abating. The S&P 500 peaked at 1,565.15 on Oct. 9, 2007, and then tumbled 888.62 points, or 57 percent, in 17 months. For investors who make predictions using patterns in price graphs, a so-called 50 percent retracement would suggest that forecasts that the recession is ending are correct and equity gains will last. Strategas Research Partners LLC’s Christopher Verrone said the S&P 500 will likely jump 7.1 percent to 1,200 “in the snap of a finger” after crossing 1,120.84, the halfway point of its rout.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aM8B_vj4d6O0