Chart and Data Download SRT20100113
Wednesday Morning 8AM Jan 14 2010 Comment for Jan 13 Close: Forecast remains bullish until the S&P reaches chart Objective at the upper red envelope, now S&P 1164-ish in the table.
The rally should make a final thrust to, or a bit above, the red objective now 1164 according to my Envelope Theory, after which a 5% correction is likely to the mid channel level in the data.
Alternatively the small red T will cut off the current rally after another bounce. The Arms Ratio is good enough to hold the market for this smallT's final rally. If the rally can't reach the upper envelope a correction is likely but not 5%., that is, not to the mid envelope level at S&P 1099. Envelope Theory requires the S&P to touch the upper limit before testing the mid channel.
Keep in mind the Envelope Theory price objective and the small T's "time of peak"forecast are not interconnected. Envelopes work in the price dimension while Ts work in the time dimension. If this rally should fail to reach the upper channel objective in the days ahead then the upside objective will remain in effect, usually via some another T, but until after this red T's correction has run its course. You can read recent posts below for more info. I will clarify this point in the next post. Terry
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