With the main indexes rising over 1% today, everything is back to risk-on, yes? Err, no. The bigger monthly index cycle can easily dismiss such market action as mere 'noise'. Lets look at a few of the key daily cycle charts...
The transports - despite today's rally, remains in a very clear bear flag. There is going to be a real struggle to break above 5200/250 by the end of this week. In fact, I'd be looking for the tranny to break below 5000 in the coming days. If that's the case...then we should look for sp to break under 1291.
My best guess for the mid-term would be something like the second chart - where we level out in this wave'2. These small moves are always a tricky thing to guess, and in the bigger scheme of things, it doesn't matter anyway.
As for the bullish scenario chart, well, I suppose if the Bernanke appeared - overtly hinting at QE3, and if the Greeks formed a cohesive new government in June..maybe then I could envision this market breaking to a new high >sp1422. Yet even then, the econ-data (both within the USA, and worldwide) pretty much sucks, there is an increasing weakness across the world economy. The idea that Sp' can comfortably remain above 1300...no, I don't think so.
Also, considering that the VIX continues to show some underlying strength...I'm still guessing the indexes will be considerably lower in the coming weeks and months.