The S&P continued toward my target in the 1600 area, in fact I believe it hit the 1.618 Fibonacci move today and could retrace from here. Several indicators of that possibility. It is way beyond its upper Bollinger Band, it is possibly forming its third bearish divergence against the Ergodic momentum indicator, and it has touched and turned back at the top of the up channel as you can see in the chart. Another cautionary item to note is the non-confirmation by the Nasdaq 100 and the Russell 2000, neither making new highs here. Soooo I would make an educated guess that the market will find some reason to pull back from here. Now how big of a correction … I don’t know but May is right around the corner and statistically it has been wise to sell in May and go away. The market is setup for this classic traders almanac rule of thumb, to come true this year. On the other hand, the Fed is a long way from ending its QE so this market is in no way normal. In fact, its an example of the new normal.
