Based on what I've been reading, there appear to be a few different camps into which active technicians fall with regard to what's ahead for the market. Please note I am not trying to speak for other cites, but I am citing the examples below since it is my impression these sites generally postulate the accompanying dispositions.
- Major Move Has Started – (example: Elliott Wave International) – the idea here is that 666 was the low, and that low isn't going to be breached for many months to come. A multi-month rise to 1000 or more on the S&P is contemplated. At some point, perhaps this autumn, or perhaps even early in 2010, the bear market resumes in earnest, and holy hell is going to break loose.
- Major Plunge is Imminent (example: xTrends) – This actually has a similar conclusion to (1) above, but the idea is that 666 wasn't the low yet, and that a somewhat lower low (in the 600 to 650 range) is coming soon. I'd prefer this to be the case, but recent action makes me doubtful. The public doesn't really seem to care about the consequences of $10 trillion in money being minted out of thin air. They just want their 401k to go up.
- Small Dip in Short-Term, Followed by Multi-Month Rise (example: Evil) – This also follows the path of (1) ultimately, but this is a "soft" version of (2). That is, we'll soften up to anywhere between 730 and 770 on the S&P and then start chugging higher.
Molecool and I tend to agree on market direction, so it's no surprise I'm in the "3" camp myself. Today's modest bit of weakness may be the start of it.
