How come Technical Analysis seems to be right on time in many occasions in conjunction with euphoria; despairs; and indecisive times that affect a majority of market participants?
Accordingly SnP500 made a short-term reversal and is now approaching the Major Resistance of 1370:
SnP500 successfully negotiated the daily 200ma Support (with minor penetration to shake out the weak hands) and started either another rally for the 5th wave or more corrective run downs.
Since the expectations for another QE or Twist Extension are at extreme high levels this time around; FOMC decision this week could make or break this highly bifurcated market.
Those were the Intermediate-Term Scenarios that pit the bulls against the bears that started to culminate in October, 2011.
The Long-Term Scenarios are pretty straightforward:
- There will be higher probability (or at least 80% probability) SnP500 will be able to rally for new all-time highs and/or a Secular Bull Market Rally has started in March 2009 significant bottom IF and only IF SnP500 is able to re-test the 1573 level for the third time - in less than half the time it took the A-B-C to form (measured from the March 2009 bottom). Thus, deadline is September 2013.
- Failure to have a Triple Top by Sept 2013 more likely will result in a Prolonged Secular Bear Market of still unknown duration but may last 20 years measured from the March 2000 top.
>> We should have a fair chance to anticipate whether the Secular Bull Market Correction of March 2000 to March 2009 will be followed by another Secular Bull Market Rally OR will it be followed by an Extended Secular Bear Market Correction - SOON.
As indicated in the last Instablog: I sold half of the SSO Swing Trade near the Spx 1344 Major Resistance and near the 1370 Major Resistance using the test of 61.8% Fibo Retrace resistance of 1363 to take some more profits yesterday.
Obviously, trading strategy for the other half of SSO positions will depend more on the outcome of the FOMC meeting.