From a longer term perspective, the Hope Rally, likely a major upswing in a lengthy bear market, appears to have the potential to best its 2012 high.
For example, the monthly chart of SP500 shows that SP500 is making a decent attempt to break above a major multi-year support/resistance area (Chart 1). The weekly chart is also finding its way to the black label number 5, one of the top three scenarios based on wave analysis (Chart 2). We have shown both of these charts many times in the past and offered discussion. Please see recent weekly commentaries for more detail.
However, from a short term perspective, it’s not obvious yet that the rebound from the June low is an impulse wave (Chart 3).
Thus, as discussed in Consolidation (7/6/12), that the market is still in a consolidation remains a reasonable assessment. The consolidation can be minor/multi-week as illustrated by the blue “triangle” in Chart 3, or major/multi-month as illustrated by the blue “triangle” in Chart 4. It's not necessary for the final structure to be a triangle, as long as it is relatively sideways.