(a) a push higher, beginning this week, lifting the S&P to the ~1340 level;
(b) a stalling by sometime in July, at which time the indexes will have lifted high enough to give relief to the politicians and re-excite people about IPOs like GRPN, P, and so on;
(c) a weakening in August, accelerating in September, completing a well-formed right shoulder;
(d) a big break in September or October down to ~1130 on the S&P
Well, there's no doubt that (a) has come true with flying colors. So far, so good. When I wrote the post, we were just about at the lows for the month, and the explosive move higher pushed the S&P to 1339.67 at Friday's close. (sounds like "~1340" to me!)
Now, if the market makes an obscene gesture at us poor bears and simply floats higher to 1400 and beyond, well, we can just quietly crumble up the above speculation and toss it into the waste basket.
On the other hand, if we get weakening on July 5th (or just fart around these levels – thus, "stalling") we can assume that we're in the (b) zone. When full-on 'tard equities like P and LNKD are lurching up double-digit percentages each day, something must be amiss.
I confess the lift higher has been a skosh faster than I would have anticipated. I mean, the Dow went up over 700 points in just over a week! But the simple fact is that things are, thus far, playing out as hoped. It seems peculiar a bear would hope for a spirit-crushing lift in equity prices, but, yeah, I did.
Recent market history always seems to color the views of traders. If things are plummeting for a while, the bears speak of 400 on the S&P and laugh at the bulls for their doe-eyed idiocy.
On the other hand, after a week like last one, we bears- from ZH to SOH – look, quite frankly, like cynical, tin-foil-hat-wearing a-holes. It's not my cup of tea, believe me.
It's all up to next week. If we have another bullish week, a lot of my current views on the market are going to get demolished. The only three words I can guarantee 100% at this point are: we shall see. All the same, keep an eye on the pattern I laid out earlier last month.