The current rally in the S&P500 index looks powerful, and this should make people wonder about the medim term outlook for the US stock market. Readers might remember my post of 16 December 2011 where I suggested that we will probably see one strong rally in the index. What is happening now is part of that powerful rally.
The key point to note is we should not see any weakness under 1265 going forward. Any such move will violate one of the main rules of the Elliott Wave Principle, that wave 4 should not trade below the top of wave 1. Suppose the current strength carries the index to 1376, then we will actually move the trigger point higher, from 1265 to the top of Wave A. Let us see how things unfold.
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