I always encourage caution when trading the market. In a sense, we are splitting hairs here. Even if my most bullish interpretation plays out (SPX 1180 to 1200ish), we are talking but a few trading days away in terms of points. If we hit the high numbers, I'm expecting it to hit in a few weeks. If we see a clear reversal, I will post it.
As far as what I'm trying to do, I stand on my record which has been reasonably good on the larger picture during the last 11 months. I'm *feeling* it again, and that's the ONLY reason I'm back. When the market was virtually flat in December and early January, I had nothing to say. I just waited it out.
Now I'm seeing an earlier-than-expected 80-week low that comes in higher than the bears are dreaming about.
Regarding the GS chart, it's clearly weak but there is nothing compelling to say that it must or will go straight down. I think it could prolong its sideways movement as long as the market doesn't topple.
I will continue to watch for a market that imitates 2004 until we get a clear signal otherwise. When I first proposed the idea that 2009 was shaping up like 2003, a few writers wanted to burn me for my stupidity--surely I would know the 9-year cycle down would change everything. Well, we've all seen the result since. Right now, the market configuration is remarkably similar to 2004 (with a few minor differences which I'm keeping an eye on).
Overall, the market remains remarkably bullish in stance. We are mostly in agreement that an 80-week cycle low is up-coming--so weakness is expected. The only question is how much weakness? What I anticipate is a phase similar to 2004 that looked ugly (July 1 to August 16, 2004) but wasn't at all. Rather it was a setup for a remarkable bullish run.
Stay tuned.
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