SPY is a bullish setup: long since October 5, expecting a possible breakout to new record highs in the next few days from its sideways trend since June. The 10 EMA is above the 20 and price above the 50; record highs leave no overhead sellers; momentum and breadth just turned up. Still long; exit timing unknown.

We are very close to setting new record highs for the S&P 500, and I will now give you an optimistic view that suggests we may finally break out in the next few days from this annoying sideways trend we have been experiencing since June.

The trend has literally been sideways since May, going up and down over and over again. It rose a little here, then kept oscillating up and down over and over again. So, basically nothing real has happened to the S&P 500 over the past five months other than this small push upward.

But I really hope that at this stage we might see a push towards the elections, or a push towards the end of the year, something like that. That would be great.

Now for full disclosure, I am in a long position on the S&P 500. I entered the trade on Monday, October 5, and since then the stock has been trending upwards. I mean, I have to say the market was pushing upwards in a slightly sideways manner. But we are very, very close.

Now, why do I say first that we are looking forward to possible new record levels? Well, it's clear that we're right on her side, aren't we? And remember, any time you reach new record highs, that's a very strong bullish signal, because think of it this way: if they're brand new record highs, then no one since the dawn of history, no one since dinosaurs walked the earth, no one since Christ last walked the earth, who still holds SPY is losing money.

This is where we want to be. There is no one waiting up there to try and sell above you.

Now, we have a lot of things working in our favor, and that is the obvious reason that prompted me to make the deal last week. We have a 10-period moving average above 20 and a price above 50 in the market.

So why do we care? When your 10-period moving average, which is your short-term average, is above your 20-period exponential average —these are all exponential averages—and the price is above your 50-period exponential average, which is your long-term average.

When your short, medium and long averages stack up on top of each other, 10 above 20 and the price above 50, that's a big and nice sign. What's really great about this is that those three moving averages show you the direction of the path 100% of the time.

Now, the trend might be moving sideways, right? The price may move sideways after a while, but every great trend ever, always 100%, starts with an average of 10, over 20, over 50, just like what happened here in April.

So, we have that now. We already have that now, which is great. It does not show you the direction or size, but it will show you the path. So, this is a great start, isn't it?

Next, we received an alert of bullish momentum in the "outlier" on the S&P 500. Finally, one of the things I'm excited about is that we've seen "market breadth" do almost nothing for months, except direct downside.

We have already seen a bearish crossover in the market widening in August, and it remained bearish until the last couple of days, when it started to rise. Now, what does market breadth measure?

It measures the number of bullish momentum signals versus bearish momentum signals we have within "Outlair". And it finally started to rise again after months. You will also notice here below that the red light shows fewer downward trends, while the green light shows more upward trends.

So, this is a great start, isn't it? The rising tide lifts all ships. The S&P 500 index consists of approximately 500 stocks. Therefore, we want to see more and more of these stocks rise together, and reduce the focus on the big names.

The market capitalization-weighted S&P 500 index is the SPY index. Because remember, we're looking at the S&P 500 chart, and if those big names are still performing well, they can offset all the smaller names out there.

This is precisely one of the reasons why I am now in a buy position on the S&P index. We hope to push the market higher in the next two days. In fact, I have provided a full analysis of why I entered the S&P index.

This is the first new deal we are making under our new Spy balancing plan, which we have historically and prospectively tested and examined from all angles. I have explained step by step why I entered into this deal in this video here.

So, click on this video to see exactly why I did that. I'm still in a buy position on Spy and looking for those exit points. I don't know how long it will take, but you can see everything about it.