Since the Ocotber 27th high of 1289.25 and the November 1 low of 1208.50, the market has been a chopfest. Although I am not a big fan of trendlines, the rising wedge off of these levels is hard to ignore.

At this time, we are creeping closer to the lower end of the wedge and a break below 1208.50 could trigger a quick selloff to 1156.50. Take a peek at the charts of many of the top stocks in the SP 500 index and you will see a familar chart pattern. Mulitple double and triple tops followed by a series of lower lows. With the top dog of the bunch AAPL struggling after its last earnings report, one starts to wonder what will be the next impetus to send the market back to its recent high. Also keep in mind the “Johnny come lately” fund managers that puked at the bottom and scrambled to re-enter, will be the first ones to jump ship on a breakdown. Furthermore, have the masterminds in Europe really come to a solution to their problems? Seems to me that there is really no solution to that mess and once one country’s problems are supposed to be solved, some other country may have similar problems.

On the other hand, you can never underestimate this market and a rally above 1289.25 would signal a move to the yearly high around 1350. It would certainly be a nice way to pad the year end bonuses on Wall Street. A few weeks ago, Goldman Sachs set the yearly target of the SP 500 Index at 1200 and have not wavered from that prediction during the recent rally. Lets keep a close eye on the aforementioned levels and see which way this fairly reliable technical formation is resloved.