A Possible Path Into Spring for the S&P 500

First things first, hats off to the Philadelphia Eagles. The better team won last night.

Second things second, below is a possible path for SPX (daily chart). If this were to come about you’d have to ask an Elliott Waver whether or not the A-B-C would be a correction within a bull market or the beginning of the end of a 5 waves up bull market.

But being an intermediate-term manager I want to try to get the next 3-6 months right. A could be a  quick bullish trade and B a good bearish one. The question would then be is C a lock and load buy amid much fear and loathing or just another trade?

spx

Sentiment did come to potential bull ending levels, after all (from Yardeni.com).

ii

As for the gold sector, this question is also important. The gold miner bull that began in 2000 came after HUI had declined to its final bottom when SPX made the first breakdown of its brand spanking new bear market (as seen in hindsight). As the stock market bounced back HUI continued weak and then when SPX failed and began a new bear leg, confirming its bear market, the miners ass launched.

spx, hui

I don’t expect things to line up perfectly with that situation. Not even close. But the general theory could be a good one. That theory being that it is not until a critical mass of market participants begin expecting bad outcomes in the stock market that the gold miners will become the unique, go-to sector.

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