Brace Yourself for Impact

It's a tough call whether SPX has already topped or needs one more rally to 2115-2135 as I preferred. Things pretty much went according to my projections last week except the high did not quite reach 2115+ before falling into OPEX. In favor of one final rally...(1) The EDT from October 2014 did not have its bottom trend line violated, (2) the previous 4 waves took approximately 9 weeks, 5 weeks, 4 weeks and 4 weeks supporting a 5th wave of ~3 weeks ending this week, (3) an EDT final wave slightly surpassing 2115 or even 2120 would be ideal, (4) there were some extreme technical reached Friday on OPEX that often lead to a bounce for a few days, (5) the last few large drops during the EDT started with a quick false drop of ~1% followed by a final 2-4 days of rally although Friday's drop was stronger than normal, (6) it seems like everybody is watching whether SPX can breakout from 2120 and although a huge rally is possible after that it also sets up the potential for a huge failure that matches the EDT odds for a 10%+ correction, (7) the gyrations in recent months have obfuscated the EDT making it merely an alternate scenario for many people and meaning most traders probably won't join the initial ride but instead try to jump on once a breakdown and bounce occurs about the same time longer-term investors see the bigger picture breakdown and exit despite what will appear to be excessive bearish sentiment and (8) Thursday has the largest number of earnings reports during earnings season supporting a catalyst after one more high. In any case, mid-May is the projection for a significant bottom with a top imminent. The more hours and days this rally lasts squeezes the subsequent drop to the EDT origin into a smaller and smaller time window. Buckle up. Good fortune.

P.S. I'll add a 9th reason of breadth. Many people look for a bearish-price-breadth divergence to suggest a significant top. Although breadth has been dropping since the beginning of March, SPX has not exceeded the price high at the turn of March to produce a more obvious negative divergence. That would almost certainly occur if SPX were to reach 2120-2135. In fact, when I looked at all 10 sectors, it appears that Utilities might be the only sector to hit a new high if SPX reaches 2120. Discretionary spending is close to new highs, but according to the Consumer Metrics Institute data linked on my site, discretionary spending has essentially flatlined for 4-5 months at slightly negative levels after being even lower. I've found it to be a good leading indicator 4-6 months in advance, so I expect the lower spending of 5-6 months ago to come home to roost in the stock market imminently followed by a muted rebound followed by whatever happens to spending in April/May/June which seems unlikely to surge. BTW, the T-Theory Confidence Indicator is still in a downtrend with many negative divergences in the last 6 months portending SPX price action to follow suit.