Today SnP500 reached the level of 1573 Triple Top first set in March 2000 before the A-B-C pattern was formed bottoming at 667 in March 2009.
<< SnP500 Long-Term Analysis: http://g38.picoodle.com/ltd/img38/5/10/21/aarc/f_12xv_af2_ubk5c.png
That was the roadmap I made last October 2011 in expectation of possible New Super-Cycle Rally for the SnP500 with March 6, 2009 as the Significant Bottom. Right now, it is imperative that we consider the possibility of another Super-Cycle Rally is not only a good possibility but has gone up from 65% to 80% probability which is a very high statistical probability worth taking the risk for our long-term investment(s).
On the Weekly Chart this is the ongoing bullish EWA:
>> SnP500 Medium-Term Bullish View: http://g15.picoodle.com/ltd/img15/5/2/22/aarc/f_141u_7eb_ubk5c.png
As stated in my comment last month SnP500 needs to form a blue i-ii-iii-iv-v rally from it's Oct 4, 2011 bottom in order to become a qualified impulsive rally. This rally in turn could become either the 1-st wave of a Super-Cycle 1-2-3-4-5 rally measured from the June 2010 bottom OR the III-rd wave of a I-1-2-3-4-5-III-IV-IV impulsive rally measured from the March 2009 bottom. We do not know which will pan out later if indeed SnP500 is able to form the blue i-ii-iii-iv-iv rally but the most important part is that a (blue) impulsive i-ii-iii-iv-v rally must be completed first before SnP500 can become highly qualified to execute a Super-Cycle Rally that may last presumably another 18 to 26 years from it's March 2009 bottom. As we know it Dow Jones made 18 years of Super-Cycle Rally from it's August 1982 bottom to it's January 2000 top the last time around while SnP500 was able to start at it's October 1974 bottom thus enjoying a 26 years of rally toward it's March 2000 top. Conservatively, based on run-of-the-mill Technical Analysis, the next Super-Cycle Rally should last approximately similar if not equal to the last one. Thus, IF a Super-Cycle Rally does unfold in the next decade or two, our expectations should be set with at least 18 years of rally (from it's March 2009 bottom) for Dow Jones and/or SnP500.
However, it is not all rosy as many may have expected. The roadmap is still definitely incomplete and can be considered corrective rather than impulsive:
>> SnP500 Medium Term Bearish View: http://img14.imagefra.me/i542/aarc/141u_d4a_ubk5c.png
SnP500 has lots of promise with 80% probability of successfully implementing another Super-Cycle Rally BUT as they say, it is not over until it's over. The wavecount is still corrective unless and until it becomes impulsive. Thus, this is the critical time where the decision for either an impulsive meltdown toward 1267 should happen for the bears OR an impulsive rally toward 1679 is within the grasp of the bulls after rallying for 4 years from it's March 2009 Significant Bottom. Likewise the 1576 is a Significant Top set in October 2007 while the 1600 area is the Significant Resistance derived by drawing a continuous trendline from 1573 top of March 2000 to the 1576 top of October 2007.
On the Short-Term Basis:
- Dow Jones Daily: http://img15.imagefra.me/i542/aarc/141u_0f7_ubk5c.png
- SnP500 Daily: http://img14.imagefra.me/i542/aarc/141u_305_ubk5c.png
IF SnP500 is able to rally this week and the next then the next potential target is the 1624 to 1654 range for a i-ii-iii-iv-v rally for the 5th wave. Right now intraday price patterns can be considered either bullish or bearish depending on one's interpretation - so I prefer to not show 'more noise' into this Instablog.
The Short-term Trading Strategy for the last Instablog of Feb 20 worked out to be very short-term indeed with SnP500 going down in an a-b-c fashion in only 4 days thus further derailing (or perhaps delaying) the bears' wet dream of an instant meltdown scenario.
I tried to short ES but failed to react fast enough to the 'possible QE3 termination' news that came out that day. Then lost interest in shorting ES on an a-b-c intraday pullback up when the Fed re-iterated their QE3 objectives. The other half of the 5% Nov SSO buys, however, got stopped out due to their very tight trailing stops. Unfortunate but that's how I play the game (which is defensive most of the time) when profits are being threatened by a possible/probable instant meltdown scenario.
For now with the current level of SnP500 at the 1573 level I will be reducing my portfolio holdings from 117.5% to 110% by selling some more SSO and some MSFT. IF and WHEN SnP500 is able to reach the 1589 Nominal Target and/or the 1600 Significant Resistance, then I will reduce the portfolio holdings to 100% as a precautionary trading strategy. For now at least 10% of long positions are having tighter and tighter trailing stops as this rally goes on.