Longer term signs are now turning favorably

The banks are rallying because the money supply is still growing and the cash reserves of the banks improved in the second half of April. I think the March lows should hold, I am much more bullish into any IT consolidation from here.

I expect any consolidation to resolve higher in the weeks ahead. There is not much risk of further economic deterioration left in the second half, imho. The market will probably react first by blowing off, most likely on FOMC, and then surprise by selling off due to the state of the longer term moving averages and speculation. But, I think it will be only a technical correction until the longer term moving averages turn by the middle of July.

Good luck.

btw, I expect SPX 1420-1430 down TL target (on log chart) to be firmly hit next week with soaring speculation, then down for a correction...

thanks makes sense from what i see here as far as a wave count. a two week pullback would be great off the upcoming top g

Correction there: I meant middle of June, not July. It will be either a running correction or a trading range, I would buy quite leveraged if we see new lows by mid June and the new lows stay divergent. This is my plan for the next 2 months now, but I will change my mind if the bottom falls apart (kind of unlikely) or we firmly hold the 1400 line for several weeks (very unlikely)...

Edited by arbman, 25 April 2008 - 03:55 PM.