It was a day of minor chop for the US equity indexes, but in the bigger picture, it is just another month for the bulls. This is month'29 of the ramp from the Oct'2011 low of sp'1074. The interesting question is how far down might the bears be able to push this market in the late spring/summer?
sp'weekly4 - broader hyper-bullish outlook
sp'weekly7c - H/S bearish scenario
Summary
Indeed, we've now seen a disturbing 29 months of almost straight up equity price action. The market has periodically teased the bears..only to whipsaw the market higher. Of course, with the QE-pomo, there has been a very strong underlying bid to the market, and as I noted to someone yesterday, I'd guess the QE accounts for at least 70/80% of the gains since late 2011.
re: chart 7c - it remains the most bearish scenario I dare throw out there. Even if we rollover in late March, with a strong down wave, it won't be until a secondary bounce fails - not likely until early May, that I'll have any real confidence that this scenario is actually playing out.
re: chart 4' - the targets (blue box) are from last summer. Its not labelled as such, but I would amend the near term upside to 1880/1920, rather than 1950/2050.
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I see a few people out there talking about the sp'1400s this year, but that sure is a long way down from here. My best guess remains.. sp'1625/1575 by late summer/early autumn, and then a final hyper-ramp across much of 2015/early 2016.
Looking ahead
There really isn't much due tomorrow. There is some home sales data, and the EIA oil report at 10.30am. There are two fed officials on the loose tomorrow (although one is not due until after hours).
*next sig' QE-pomo is not until Thursday
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Still patiently...waiting
Another day closer to spring (as I will probably also note tomorrow), and I'm still waiting. Yours truly has not traded the short side since last summer. The bigger picture has changed in my view, with the 'ultimate doomer' scenario of a move <sp'666 now off the table.
For the regular readers out there, you should remember my 'moon madness' posting from last autumn, where I dared suggest we might never go below sp'1500 again. I have not changed that view, and for those not already aware of it, well... I guess I'll have to go over that again sometime soon.
Anyway, Yellen awaits..not tomorrow..but Thursday. Indeed, Mr Market might well see another day of chop - although hourly index cycles offer upside into the 1860s tomorrow. Regardless, I won't be short, not...quite... yet ;)
Goodnight from London
