Saturday, 24 March 2012

SP'1440...or 1550?

Good morning! Here is something to initially dwell on this weekend....

SP'monthly..the bullish scenario

Near term, a move to  1435/40 still seems highly probable.

Most interesting of all...the fib' extension (I think I've done it right), is roughly the 1550 zone by June-August period. That would very nicely fit in with the expanding asecending wedge we're currently in. A challenge to the 2007 bubble highs of 1576 looks feasible.

Across even longer term charts, a move to 1550 looks even more logical.

For the bears, such considerations are obviously sickening, and sheer heresy. There sure won't be many permabears left if sp' gets to 1550 within the next 3-6 months.

Trading this nonsense

I'd argue its pretty simple for those with 'serious money' to trade this scenario/key threshold.

If we see a few closes in the 1450s, then another 100pts up is free money - via low vol' melt up.
If we get stuck at the next up cycle, around 1435/45, with lots of candle failed spikes, then we have a good chance for a nice 6 month decline to around 1150 by early Autumn.

Stops -for both long/short positions at the 1430/50 zone will be very important to have.

More later.