The S&P500 index broke above a 9-week bear trend line at the end of the last trading week and, with the news of a temporary trade war truce between Presidents Trump and Xi Jinping, this begs the question about whether this breakout might mark the start of a Christmas Rally.

The application of my TC trading algorithm to stocks is a relatively new endeavor following coding for use on the Trading View platform during 2018 but is progressing quite well with two great examples during last week on the S&P500 and Target. There is a new TC LONG signal on the S&P500 but this needs a relatively large stop. However, the target for this breakout trade is rather ambitious and, if successful, would mean a Return on Risk of over 600%, or 6 R.

S&P500 weekly: the index printed a large weekly candle and broke up through a 9-week bear trend line. The target for this breakout move would be the psychological and whole-level of 3,000:

S&P500 daily: price action is below the daily Cloud for the time being:

S&P500 15 min: there has been a recent TC LONG signal off the 15 min chart but the Stop needed is relatively large giving a Risk of 40.32 points.

Return on Risk: any successful push up to the 3,000 level would result in a 600% Return on Risk (RoR) or a 3 R trade result:

RoR = [(3,000 – 2,750.32) / 40.32] / 100

RoR = 600% or 6 R

Summary: the S&P500 index has made a bullish trend line breakout and triggered a new TC LONG signal. The traget for this breakout trade is 3,000 and this would equate to a Return on Risk of over 600% or 6R.