So back to the SPX. Numerous developments have pushed the SPX higher but it really is looking exhausted and 1515 is an area that seems to have been a temporary ceiling, but today has given me the first glimpse that higher is possible and the max pain I see now would be 1530, the mean of the pitchfork (key with the SPX, is it seems reluctant to go over the mean). I think the way to play this is with stops as it could easily ride the mean higher as time goes on, and therefore crushing shorts who don't have stops, along the way. We do have a negative divergence in the MACD and RSI is at 66 which has room higher but given the exhausted feel of this I think upside is limited.
So if I consider the bottom of the pitchfork, I see 1450 as the likely target. I favour a 50% fibonacci pullback so 1436 if 1530 is reached, unless the high is 1517 then the fibonacci target is 1430.
RUTThe RUT is a different beast in that it has lived above the pitchfork mean since January 2nd (as opposed to the SPX which has remained below the mean). Given the direction I believe the SPX will take and the fact that the RUT ususally outperforms the SPX in both directions, I would suspect that the Feb 25 - Mar 5 timeframe for a low will be a more significant drop for the RUT as illustrated below: Notice the fib timelines seem to agree with an imminent turn documented below:
-9.5% drop predicted to 830
The MACD had a negative divergence a week ago, and the KST indicator is reading again is at an extreme juncture. The next chart illustrates additional reasons why I am reluctant to sell at this point......notice the extreme KST and subsequent price action of the RUT. If 9.5% drop in the RUT materializes, that will net me a roughly 12% gain which I will still be pleased with, even if I could have done much better.
By the way, the drop from Sept 26 to Nov 16 was 9.6%.