The SP 500 index is approaching a
likely top of wave 5 of Primary wave 1 up from the Jul 1st 2010 lows of 1010
on the Index.
The predicted top was 1285-1315, with
1285 likely by Mid-January 2011. Currently, sentiment is running at
extreme highs as last seen in Mid April when I forecasted a wave 1 top of a
13 month rally was ending. Also, as high as January 2010 where I
forecasted a correction before a 900 point Dow drop.
5th waves are very difficult to assess
because they can truncate (Shorten) or Extend and run higher than planned.
My best advice is for investors to begin raising cash and only holding
the best quality stocks, or certainly be careful with new positions. If
you own positions with a strong capital gain built in and you can stomach
some corrective action, then you can hold on. However, initiating brand
new positions begins to carry bigger risk as we approach the top of this near
6 month pattern.
Below is an SP 500 chart showing the
rally off the 1040 pivot wave 2 lows. We forecasted a run to 1220 way
ahead of everyone else, and the high was 1227. Then I forecasted a top
at 1225 with a likely drop of 40-70 points in the SP 500. We dropped 54
points and pivoted up and rallied. I then forecasted a 1285 likely high
by Mid January
Right now the market is going sideways
a bit as you can see on the chart attached. We could get one more
rally, but just be careful. Over at the ATP service, we have whittled
down our core long positions to only 5 from a high of 13 a few months back.
We have initiated a lot of “Active” short term trades, and
we are preparing to begin trading ETF’s soon as well (likely bearish
I expect the SP 500 to correct over 100
points from the final highs.
Market Trend Forecast
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