Sp'weekly
sp'monthly
Summary
The weekly chart shows how after the opening hyper-ramp, we're now stuck at the highs from last September. Although once again, I'll note that the two leading indexes - the Transports, and the Rus'2000, are already way above their Sept' 2012 levels.
It sure won't take much of an excuse to break over sp'1474, and no doubt if that occurs..a major short-stop cascade would occur, and we would see some chasers come in, probably kicking the market into the 1480/90s. Regardless of news, I don't expect the big 1500 level this month.
Feb/March target
On balance, it still seems we are going to see the sp'1510/20s next month, or in March. With QE now permanent (despite what the FOMC minutes were translated as suggesting), it remains the case that the underlying pressure will be to the upside.
Looking further out, to April/May, a major wave to the downside is certainly possible, and if that's the case, then the low sp'1200s would STILL be the obvious target in my view. A move from the 1500s to the 1200s sure would make for a massive shake-out, but that seems highly unlikely until Q3.
As is usually the case before a major down wave, we would arguably need to put in an initial 1-2 month down cycle (such as May/June 2011) before any major wave can occur. It takes considerable time to build downside momentum, and right now, we obviously have quite the opposite.
First things first then, lets see if the 1474 line holds, then a minor retracement, and further gains into February/March.
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I remain short, seeking a brief retracement down to at least sp'1445/40 later this week, and then I look to go heavy long - including SLV (the precious metals are displaying a giant bull flag on the weekly charts)
Goodnight, from a somewhat snowy London