New highs, with a solid slap of the daily and weekly SPX Bollingers? That would be great.
But if we don't make it quite that high, if we clear 2100 this week but without new highs, then there's a triangle count that may work as well. It would eat up some more time as the market loiters up here until the 4/27 turn date and the April FOMC, like so:
|SPX daily with triangle count|
The rationale would be that the market will continue to call the Fed's bluff until it is forced to hike short-term rates to earn back respect. It would force Yellen's hand by pegging the SPX up near 2150, allowing her to claim victory over the dark forces of deflation and raise us 50 bips in April, and once again in June.
This sort of post really riles my pal Permabear Doomster, who needs to relax and understand what we're trying to do here. We're war-gaming the end. These are Soviets-in-the-Ruhr scenarios. The existing tape gives us a set of targets both north and south, a road map of how we exit the 2009 reflation-rally channel and what may happen next. You'll notice that I'm drawing the same lines again and again, all waiting for a signal from a plausible overbought top, and that's OK.
The market will tell us when she is ready to implode. In the meantime, be patient or make hay if you can while the sun still shines.
Looks like the bears are going to get squeezed hard today. Cool.