Mar 18, 2011: The news driven market managed to overshoot down to 1250s, this is a multi-year major support level. At this juncture, it appears that the central banks will be able to absorb the damage by inflating against the appreciation in JPY.
However, cyclically lower lows appear to be still ahead due to the overwhelming downside momentum. The initial interval for the intermediate term cycle low so far provided a bounce, but the leadership and the breadth strength would generally require the lows to be either retested or overshot. So, the projected cycle lows per Feb 23 update (Mar 16-25) should be still ahead. Currenty, March 22-25 seems to the interval for a breadth cycle low and the date for the most powerful upside impulse from there.
Finally, the current projections rather turned less optimistic for a spring rally and the inflection point will be around the gap at 1286 level on SPX basis again. The market should continue to find stiff resistance in spring around this level and how it overcomes will be critical for the new highs and sustainability of a rally into summer. The breadth leadership and the market structure up to the Feb top generally foretold us about a new high in spring. However, the second half of 2011 appears to be now more challenging and the market may be about to mark a longer term top...
Best of luck.
Edited by arbman, 18 March 2011 - 09:00 PM.
