This past week, the tune of 85 Billion dollars fueling the markets continued driving up the S&P past the expected decline of the primary roadmap, now calling this into question. W.D. Gann always regarded the 60 yr cycle to be the most important, and that would align to the alternate roadmap which the current market levels and recent behaviour seems to be moving towards. Both roadmaps predict a decline into late February early March so neither is invalidated at the moment, however the alternate roadmap is predicting a 7% drop and seemingly more realistic. Reminding that the Primary Roadmap predicts a low of March 4/5 and the Alternate Roadmap predicts a low Feb 25 - 28 (2013 RoadMaps).
Lets look at my reasons for the S&P finally being ready to start its correction. This first one using Andrews Pitchfork shows the S&P is ready to meet the mean at approximately 1515 in the Jan 28 - 30th time frame. I believe that 1508/09 will be the high however either way this first top is here and the reason for this is the Alternate Roadmap had the 28th the actual turn date. According to the chart, 1440 should be the bottom of the drop meeting the bottom of the pitchfork, however I think we'll get carry through with a 50% Fibonacci level of 1424. This is my late Feb early March target.
Next you see the trend channel that has developed and will give us some short term signals confirming when the trade is on, a TTT moment. Shorting an upward break of 1515 might be risky, so potentially a downward break of 1502 would be safer as the trend channel would be broken and start the first wave of the decline, minor support at 1485, but likely first wave hitting 1474 which is the first major support (also noting this is the 18 MA).
The next chart shows basic fibonacci levels using the November Low and my projected high of 1508. I'm suggesting that we will at least see 1424 which is a 50% retracement and where I will start my first long position. The ultimate would be 1405 (61.8% retracement) and where my final long batch would be bought.
Lastly worth noting:
RSI is at 75, KST is at 40.4 and about to negatively diverge.
RUT is overbought for the longest period as far as I can see spanning many years by some margin with RSI at 77 and KST has just had a negative divergence.
TRAN is at parabolic overbought levels with RSI at 85 and KST at 87!!!
Reminding I will update my trades in real time in the Trade History section. Currently trading TZA as I think the drop in the RUT will be larger on a percentage basis during the same time period.