On November 3, a day before the US election, I wrote that the S&P index was still in a downtrend and we should use any recovery to the prior high of 1045 to get out of longs. I also suggested that should we reach 1136, we should turn short there. As it turned out, the high was only 1005. Today the front page news is all about the huge Chinese economic stimulus package ($586 billion). Asian equity markets have all reacted positively. The SNP futures are up nearly 20 at the time of writing. So what does all this mean? My guess is we could end up with a complex pattern that will be hard to predict. I stick with the proposition that if we reach (the now revised resistance of) 1129, we should turn short, of course with suitable stops. However, I do observe some resistance even at 1015. But I would not turn short there. Am I sure we will get this rally? No. All I am saying is there is still a chance for this rally, and if it happens I will sell into it.
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S&P500 Update: May 19, 2009
S&P500 Elliott Wave update:21 May 2009
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