Current SPX Position: Long at 1592.28 (Last trade short trade stopped out 1593-->1592)
Next Action: Stop at 1596.39
System Score: 6.5=Bullish=Trend Score + Turn Score=10-3.5
Proposed New Score: 58%=Bullish=Trend Score + Turn Score=48+10
The System is long at 1592 as planned. Futures are indicated much higher due to the slightly-better-than-expected jobs number. I suspect SPX will test 1615-1620+. The last few days of whipsaw reset hourly indicators enough to allow this move, but probably not enough for anything more than a 2-3% pop. Thus, I expect the SPX 1595-1600 breakout level to be retested shortly. Up to this moment for the last 6 weeks, I have been expecting SPX to retest 1525-1530 at a minimum followed by another new high (SPX never got closer than 1536 and has now made new highs). However, SPX will be entering the window for a significant top (8-10%+) next week based on my historical discretionary spending analyses. The subsequent 2-3 weeks are more likely to be a top, but next week is possible. So, once today's rally fades (probably within 2-4 days near 1620) I now think we'll either see a small 2-3% correction followed by a slight new high OR we'll see a multi-month top. Either way, late May and June are not likely to be pretty. A typical 8-10%+ correction from 1620ish equates to 1450-1500. There is a ton of price-volume support at 1500-1550 meaning a brief trip to 1480-1510 should clear out most stops and 8-10% above that is 1650ish making that the likely extent of any rally in May. For now, the System remains narrowly bullish but I suspect the Score will swing back to neutral-to-bearish by early next week setting up another short trade. Whether you take away my 6pt screwup last Friday or not (traded at 5hr resistance rather than 4hr resistance), the System weathered the last couple weeks of whipsaw very well with minimal losses. Good fortune.
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