Off to the final race

Last night, SPX busted through 1018 easily, the activity surely resembles a wave 3. From my last post, I mentioned SPX need to exceed 1013 quickly else the momentum will be to the downside. It surely fulfilled this yesterday. So now with the structure clearer, we can narrow our probabilities. The H&S formation of SPX has been cancelled, but the triangle of Gold/Silver remains. Short term target is US$1085 for Gold if it breaks to the upside. However, it will best to stay neutral at the moment and not second guess the direction. Remember, a breakout from a symmetrical triangle can go either way.

SPX is now in the final upleg. There are 2 possibilities here.

1. Its in major wave 3 of C of C. We should expect a weak corrective wave 4 and a final rally to SPX 1041 to complete the entire rally from March lows. Major resistance remains at 1044. The great bear should resume thereafter.

2. Its in minute 3 of major 1 of C of C. This paints a more bullish target of Dow 10k and SPX1121, a 50% retracement before the bear resumes.

We will know by then if the market has topped. The reversal will be strong and violent, befitting of the status called "Great Bear".

Watch for negative divergences on the RSI/MACD of weekly charts as prices make a new high.

As prices makes new highs while volume is decreasing, distribution is also going on silently as institutions and big boys unload their holdings to retail investors. Be careful not to be the one to carry the last bag.