In yesterday's update, I noted that I believed the downward correction had ended at 1451, and expected higher prices directly. The market headed up a few points yesterday, and continues to appear poised to reach new highs. Due to the position of this wave in the big picture, it is quite possible that my short-term upside targets are too conservative, though a "standard" wave would be nearing a turn and deeper correction. As I noted on January 2:
...this is not a rally I would look to short anytime soon. There is massive pent-up energy in the charts, and nested third waves are not to be trifled with. Third waves are the "point of recognition" for the masses, and tend to be strong trending waves that rarely let up for very long. Third waves tend to peg indicators at extreme readings and stay there for much longer than seems reasonable.
I do want to briefly call attention to the similarities between the current wave and the intermediate bottom which formed in November/December 2011. I recall that rally as being one which defied gravity, and which bears kept trying to short (myself included at times) -- and yet it ran on and on for months. The present rally has similar hallmarks; the difference is the present rally falls in the third wave position at higher degree, and that suggests it should actually be faster and stronger than the previous wave.
In conclusion, there's little changed in the outlook of late. So far, there are no indications of any kind of significant top. Trade safe.
Reprinted by Permission; Copyright 2012, Minyanville Media, Inc.
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