The stock market continues to carve a base before making its next move higher. We believe that the lows are in for the current correction, but it is hard to know how much longer we will be waiting for the indices to break into new 2007 highs. The NASDAQ Composite, S&P 500, and Russell 2000 are currently sitting on or are right above a mid-term uptrend line. If the indices break below this line, we will likely have to wait a while longer before we break above 2007 resistance. If the indices are able to stay above these lines in the coming days, we expect new 2007 highs to be here very soon.

All three of the charts tonight have Fibonacci retracements on them from the high in February to the bottom in March. As all three of the indices have broken above the 61.8% retracement and have had a sustained break above their double bottom formations in March, we can conclude that the bottom of the correction has already happened.

Today’s low in the NASDAQ Composite was right above our blue uptrend line. If this line is broken we expect the index to fall to 2430 at a minimum. 2420 is more likely and the 2400-2410 area is a possibility. If the index stays above the uptrend line it should be headed to 2007 highs.

The S&P 500 is sitting right on this uptrend line currently. A break of this line should bring the index to 1425 at a minimum. 1410 and 1420 are lower support areas that would be a possibility. If the index is able to stay above the uptrend line, we should be hitting 2007 highs very soon.

The Russell 2000 is also sitting on its uptrend line. A break of this line would likely bring the index to 795 at a minimum. 790 would be a possibility. The Russell 2000 should be headed to the 830 area if it is able to stay above the uptrend line.

It is a near certainty that the bottom of this correction has already happened, but it is difficult to know how much longer it will be before we are at new 2007 highs. If the indices we discussed tonight are able to stay above their uptrend lines it should be very soon.