Daily Index Cycle update

The main market rallied by around 2% today. The gains were mostly all seized by 11am, at which point the market largely flat lined - the sort of nonsense we've seen so many times in the past few years. Volume was light, and most of the gains were probably due to short-covering - not least in stocks like AAPL.


Dow

Sp'daily5

Trans

Summary

I started the day very much open to re-shorting the market @ sp'1370/75, but the market was breaking 1375 before we even opened. With the market liking the housing data (as I feared), the gains just kept building, and a re-short became completely out of the question.

Clearly, the current down wave (however you want to count it) is over, and we're headed up.

The only issue is how far?

My original outlook was....1345, then 1400/25...and then low 1200s..possibly as early as December - not least if the fiscal cliff is not adequately delayed.

sp'daily4 - original outlook

The above chart is my 'best guess' for the weeks and next 2-4 months. I could be wildly wrong, we'll soon see.

Bears need to put in their first lower high <1474, rollover..and take out the June 1266 low. If that happens, then 2013 could be 'very interesting' indeed.

A little more later.