The market ended up going to the 1614 area as I expected but it forgot to correct to 1586 first for the trade set up I had in mind, so the short squeeze that I posted about earlier in the week materialized today when the 1597-1600 level broke. And now that we are above 1600, the end for the wave that started at 1345 is coming fairly soon. The first revised target I had for this Int W5 was 1617 which I posted last month but now that this W3 wave has already reached 1618, I think the second revision of 1642-1668 is more appropriate and it goes well with the Cup and Handle Pattern in play, the "ideal" target given the 1536 Int W4 low and my statement from the first day of the year:
And now that the picture is clear, the market is now going to play catch up with the rest of the world, so I am expecting 1475 to be taken out fairly soon and perhaps see the all time high being challenged by May 2013. The Bullish Engulfing Pattern is confirmed and all the 3 trends I track have turned bullish with today's move, so as long as the trends stay there we should see a bullish January.
Once we reach the LT-W3, I expect a mild W4 in the summer. So perhaps a correction to the 1536-39 area or the 200 DMA (which would be ideal if the 200 DMA was around 1536-39) and then the start of LT-W5 late summer/early fall.
On my VXX hedge, I miscalculated and got squeezed for breaking my own stop rule yesterday. But I managed to improve my cost average a little and I am out of the position until the W3 is finally over so I can hopefully recover all the loses there and perhaps makes a little profit too. The HSI seems to be finishing its Int W1 and it seems like the SSEC will soon follow, so hopefully they will keep rallying as I need my FXI to hit $50! lol.
Have a Great Weekend!
Main S&P 500 Trends
Short Term Trend = Bullish
Medium Term Trend = Bullish
Long Term Trend = Bullish
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