Wednesday, June 20, 2012

Big Picture ~ 20 June 2012

In my last update I expected that the market would form a bottom between 1250 and 1270 and then rally to 1300-40. On June 6th I turned bullish and raised my target to 1330-65. Yesterday, the SPX hit the higher end of my target area (1363) thus I think it's time to have a look at the different scenarios again.

1360-65 should be an important level.

We got five waves down from April till June and now three waves up. So, the count looks pretty good:

If 1326 and 1335 are breached, the next wave towards 1200 is most likely underway. Should we get two consecutive daily closes above 1365ish, this count is most likely wrong.

I'm still not sure which long-term count I like more but I think it's not really important because we should see a decline to 1200 in any case:

Bearish for 2012 but bullish for late 2012/2013:

Bearish for the next few years:

What if 1360-65 is breached?
If this level is broken, I expect a rally back to the highs and most likely even higher.

Possible bullish count (for the Dow Jones):

This count is invalid below 12550 / 1326 (SPX).

Above 1365 = bullish
Between 1326-65 = neutral
Below 1326 = bearish