The market got to the 1310 target I mentioned yesterday but at the same time there was a lower high that completed part of Bullish Ascending Triangle pattern. However, given the fact that this rally is overly extended and this is a Wave 5, I am inclined to think this is a Bearish Rising Wedge with a coming correction on Monday or Tuesday. So I went ahead and re-shorted 75% (I give the BRW a 75%) of my usual short position at 1310 to cover at the test of the rising trend or at a Fib retracement. Is hard to say how much longer this rally will go but if Elliott Wave Theory is correct, all the bullish waves are about to be exhausted and no further upside will be possible without a meaningful correction.
On a side note, I saw this article on CNBC which mentioned a target for 1775. This target would fit the "bullish P3" count I posted. And given the fact the Feds and the President use the stock market to instill confidence in their policies, I am sure the government will do whatever is necessary (as in printing enough money) to make sure we end up with an all time high for the S&P 500 by the time election time comes around. Then Obama can point to the success of his policies by telling us the market is way up.
Is the Fed's Real Target 1,755 for the S&P?
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