1589

The market has finally reached the 1589 target I first posted early March and now there is complete wave harmony :) What has been surprising is that this rally came out of nowhere as there is no significant market moving event. I thought the Cyprus  resolution (remember all that end of the word drama?) would cause a rally like this one but markets didn't do all that much. What we have now is the second strongest bullish wave of the year at 50 points, which I am labeling a "Stand alone W3" just like the wave from Jan 1st, which ended up being 130 points. And looking closely at the 30 minute chart, the market actually did put in a right shoulder for the IHS but it was a much smaller bearish wave than I had expected.

So now that we are at 1589, the target I posted yesterday is looking fairly close. However, since I am treating this as a SAW3 (yes that's my own invention), this is free to go all the way to 1650 in May, right before we get Fiscal Cliff 2.0 which will serve as an excellent excuse to correct again. If we get to that level, chances are we are seeing a break out of the Broadening Formation below and a multi-year and possibly multi-decade bull market.

So if you are planning to short this market, be extra careful. I hold VXX as a shorting instrument to hedge and I don't worry much because that is not much compared to my long positions. But if you are net short, just keep in mind we are likely in a bullish W3 which are inherently difficult to predict as far as long term tops go. Best is to keep in mind that all signals are flashing green.. I tried to warn the guy below after he came out with a long article of why the market was going down, but I highly doubt he paid any attention to this charts for coffee guy.. lol

Main S&P 500 Trends

Short Term Trend = Bullish

Medium Term Trend = Bullish

Long Term Trend = Bullish