The Future Looks Bright - Not Really

With the market going from an overbought condition to an even more overbought condition on Friday all while breaking through a key support level (you can only dream of this during holiday traffic) without even flinching, all three of my market forecasts just went out the window. However, at least things looks a little more clear today than last week as to intermediate term market direction. And that direction is up, at least for a little while longer.



The above picture is how I see the near term direction. We are still massively overbought on all time frames and are due for a nice pullback. However, I expect the pullback to be at least 50%, but possibly not much more. But, the only place I'm willing to draw definitive line is the low on the 29th. That should not be violated on this pullback. There will be plenty of time for that. After that pullback we should see a steady move towards a 960 target. It is possible we go much higher, possibly even to 1030 area, but probably not much higher than that. Once this move fizzles out, we will move down to new market lows in a wave 5 to complete primary wave 1/A (still not sure if it is a 1 or an A). I've updated my longterm wave count also, so you can see how bearish I really am. Possible targets on the SPX reach as low as 400 over the next several years.