50 Day MA

I posted yesterday about the potential for a break out today and the market did exactly just that. But instead of gapping up the market opened with a bullish bias and just kept climbing for most of the day and leaving a bullish close for the day and for the entire week. And while the S&P500 fell short of testing the 50 day MA, the DOW closed above its 50 day MA. So there is a good possibility the correction might be over as soon as next week. And the same reasoning I used in early December 2011 for a rally applies here. Should the market be able to overcome the 50 day MA and trade above it then we will be on the way to 1400 and if you haven't been long, you can still use the next Trend Average test as an entry point.

Also, I wanted to add a comment on my opinion of "catastrophic crashes" not happening. When I refer to this type of crashes, I don't mean a 50% market decline as they are actually reasonable declines during recessions. What I meant by catastrophic is DOW going to 400 or the S&P500 going to 50 (from current levels!) as envisioned by the bearish "P3" EW crowd which to me is completely absurd.. That's why I don't follow the orthodox way of counting waves as it fails to take into consideration real GDP growth, wealth creation, inflation and basic Austrian economics.

Have a great weekend!