Hi Byram,
Factoring in the double bottom pattern that occurred between late Thurs afternoon day session, through globex, then into Friday morning, with the first bottom hitting 1197.10 around 4:10pm Thurs, then rallying up to 1104.90 at 8:35am Friday, then making the 2nd bottom at 1097 @ 9:10am Fri., I believe we are definitely in for a sustained move higher.
Since the double bottom was activated by prices moving back up through 1104.90 from the 2nd bottom, prices have followed the anticipated course of action precisely thus far. This is one of the simplest and most reliable patterns to project, and targets exactly 1138.80 on the June S&P. Any pullback from here (1118) is in my mind a great opportunity to catch the boat if you missed it Friday morning, but we're not assured of another one since we had the 9 S&P pt. pullback between 1pm & 3:30pm on Friday. I plan to ride the wave, petal to the metal, with a sell stop at 1096, 3.5 pts. below my entry point on Friday.
I expect the target to be met within 3 to 5 trading days, and then we'll probably see a 10 S&P pt. pullback from that area. If the target is subsequently exceeded (which seems likely), I would expect the market to continue this up move at a multiple of the move from Friday's lows (1097) to the target, 1138.8. 2 would be the likely multiple, so 1180.6 would be the secondary target and probably the end of the move before the next sizeable downdraft.
Happy surfing,
David |
