The market refused to pullback today and instead it went for a test of the 50 DMA and it is now very close to its 1970-1977 resistance level, which is within range of the second Inverse and Shoulders target posted early in the rally. If the market intends to rally for the rest of the year, we might see the market put in a neckline around these levels and pullback to 1925 and then mount a huge rally to 2120 more or less on yet another IHS. I am sure some people will find it hard to believe it, but the technical background supports it. The requisite for this potential rally is the recapture of the Medium Term Trend. If the market fails to hold the 1925 support level and most importantly the 200 DMA on the coming pullback, then we will probably get what will most likely be a C wave to test the 1821 low. Looking at the fundamental picture and some of the media headlines, the issues that were a problem a few day or weeks ago (when the correction started) like Ebola, Russia, oil, and Europe seem to have been sidelined. But the bottom line remains, Europe is near zero growth which might prompt them to do their own version of QE. The US and China continue to grow substantially, adding between only these two countries $1.5-1.7 trillion worth of GDP this year alone. So the background picture favor the bulls in the intermediate term. The only factor that I see favoring bears is the market might need more time to consolidate gains from the last 2 years.
I am going to short to hedge at resistance if the market gets there or add longs at the 1925 level/Test of the TA, which ever comes first.
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Short Term Trend = Bullish
Medium Term Trend = Bearish
Long Term Trend = Bullish