I have been monitoring this breakout to see if we are in an Elliott Wave 5 move where the breakout post sideways churn soon reverses and leads to a deeper correction, versus the recent breakout being the start of a mega Elliott Wave 3, which is the melt-up wave.
Well the FED, it appears, wants it to be the latter, since next week has some mega POMO bond buying, which frees up money for buying stocks. They usually time the big POMO days for big economic news events, to make it appear the market reaction is favorable, or at least to soak up some of the red ink if the reaction is bad.
Last Friday's jobs report was fronted with $5.2 billion of POMO
This week they did a total of $7 billion, with nearly half of it coming yesterday to welcome Janet.
Next week has a total of $16 billion - more than twice as much as this week!!! - with Monday, Tuesday, and Thursday ALL big POMO days, which very unusual to have so many biggies in the same week.
This says to me two things - either the market is up huge next week to push us into a clear Elliott Wave 3 melt-up, or the rally falters and dies once the POMO is out of the way, making the FED intervention impotent for the first time.
This seems like a WOW! moment in FED manipulation.
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We will know the stock market has reached the melt-up phase when the hedging indicator at the top of the chart below turns positive. Till then, longs should remain hedged.