Short term Top is in...SPX

Next is down for the S&P, although a retest of 1530 is possible.

On Feb 8th post, the charts indicated that max pain was 1530, and we reached that and stopped at 1530.94 on Feb 19th.  My price levels appear to be accurate but time was off as I anticipated the intermediate top happening between Feb 12 - 14, and as we know it happened 5 days later.

Here is the updated S&P Chart from Feb 8th, recognizing that the pitchfork mean is being respected and not violated, it appears the continuing uptrend will only ride the line if that is indeed what Mr.Market is wanting to do and a break above this seems unlikely.   Target is 1460, however 1440 is also possible depending on the events driving the S&P down.  My thought is that since I see new highs ahead, that 1460 holds as the bottom and correlating with the bottom of the pitchfork.

As predicted on the Fib time scales, the RUT topped out at 932 (930 was predicted).  Now in considering this, I am playing with TZA but my first trade is a major loss.  I thought that it wouldn't make it past 878, and as such I stopped out rather than holding on for March 4th - 7th since I'm thinking the S&P retests 1530, thus bringing the RUT to approximately 932 again and sometime Monday or Tuesday I'll be reloaded on TZA.  What is important on the RUT is that the mid BB point is at 911.76, so I figure a retest of the upper BB which is now at 928, then breakdown and below 911.76 for a second time and confirmation that the low I am anticipating ahead materializes. 899 however must break and is a pivotal point.

Lastly, I want to show the bigger picture on the S&P.  Here is a massive rising wedge developing and maturing which is suggesting that we do have higher prices ahead and new highs, perhaps 1576 for a major double top, or at least so I think.   This could be a point where the market rockets higher into unchartered territory, but the multitude of breakdowns happening all around us, I do find this highly unlikely

S&P Open to the possibilities.....

I think at this point, you have to be open to what the market is going to give you.  Stubbornly, I held my short on the RUT using TZA without using stops and without staggering my entry points.  This has proven to be a poor decision and one I need to learn from.  At this point I feel its more risky to sell  and miss a recovery on TZA rather than to hold.

SPX
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.

RUT

The 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%.

S&P Max pain?

On the last thread, I presented a case for the S&P which saw potential to 1515 (mean of the pitchfork) and sure enough that is where it hit (just shy).  I thought 1508 would hold as resistance but you could see another push forming when the S&P failed to close 2 consecutive closes below the trend channel.  Hardly even a dip!

So the first chart I'm going to show you is the same one I had last week since it's still in play, except the target of 1424 was based on a 1508 high.  I'm still expecting a 50% fibonacci retracement which would be approximately 1428 as a target for late Feb early Mar however this chart is important as I think you'll see how the mean is respected (unless we are breaking to new highs from here with no pullback) and this is why I'm showing it again:

The next chart shows the fibonacci support levels, and where my target is:

Now here I'm using Gann angles along with fibonacci time using 2 major lows, and what its suggesting is that my 1428 target is certainly possible in the time frame I'm looking at with absolute support at 1399.  What the chart is also telling me is that Early May is looking like a major turn date similar to June and November lows.   What I didn't illustrate in the chart, is Feb 19/20 I see 1457.

Now, after seeing this, have a look at the 2013 Alternate Roadmap which I think is now in play, and the link between the 2 charts is telling.

How are you playing the next 1, 2, and 3 weeks?