The market rallied as I expected (despite being down as much as 7 points in pre-market) to the 1570-1575 level on positive earnings. And now that the right shoulder of the Head and Shoulders is there, we'll have to see the magnitude of the coming bearish wave to get an idea of when the correction will end. Going by pattern alone, the target is 1478 which should coincide with the 200 DMA assuming it takes couple of weeks to get there. However, there is also that potential Inverted Head and Shoulders I've been tracking so watch out for the 1552-1556 level. If that level holds then that pattern targets 1618 (Nice Fib number there). Therefore, we have another case of one of these patterns eventually failing (Bullish wave going beyond 1597 invalidates the H&S), which one will fail is anyone's guess. But at least we are aware of what key levels to watch. I am still labeling the waves a double Zig Zag and should the Y wave equal 1.618 of W, then we will be looking at 1480 exactly which will fit the H&S target and 200 DMA nicely.
Per my plan from last week, I loaded up on the same number of VXX I've been trading around the 1578 level. And the real challenge will be to take profit or not to take profit when 1552-1556 comes. I hope they market will make it easy for me and just gap down that area.. lol.
Main S&P 500 Trends
Short Term Trend = Neutral Leaning Bullish
Medium Term Trend = Bullish
Long Term Trend = Bullish
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