Continuing Confirmation Of The Trend

The market continues to confirm the uptrend. The Dow and SP-500 fired off long squeezes today, and the SMH is nearing a long squeeze signal. Sometimes the market will pullback sharply for a day or two after such a signal, but this should not be cause for alarm. The financials acted particulary well today seeming to take no notice of the impending stress tests results. In particular WFC and BAC were up sharply and the UYG has broken out to new rally highs.

SOHU was up but closed poorly. I still see higher prices for it. APOL closed down on the uptrendline I referred to yesterday. I think it will bounce up for a couple of days before breaking down. The trend in APOL remains down, so we will see.

Gold is in no man's land. It can't seem to decide which way to go. Perhaps we will find out soon, but I am close to being stopped out of my DZZ position. I will wait for a proper fractal pivot to form before considering a reversal to the long side, and I will be prepared to short gold with the DZZ again if stopped out before the downtrend resumes. Sometimes you will take a few hits in row bofore you catch the big trend.

With regard to Terry Laundry's post today, his near term projection is for a June 09 top. However, his post from last week on the longer term advance/decline T shows a top in June 2010. As far as the near term is concerned, I am basing the possibility of a July top on the fact that significant swing turns have occurred in July in the last several years, particularly the last two which were in mid-July. Also, the seasonal post-election year pattern calls for a top in late July. I suspect that any pullback in June could be a 4th wave or a small b wave, but that is pure speculation. I will probably take partial profits at a June top, particulary if upside rally targets are hit at that time and hold on to see if more can be squeezed from this rare opportunity.

(I will definitely provide a chart with my expectation of a combination correction as discussed yesterday. I am just trying to figure out the best way to present it. Also, I am near to finishing an important engineering project and I have another townhome closing on May 15th, so it looks like I will have more time after that to do some charts. Mr. Obama's $8,000 first-time home-buyer tax credit has certainly been a help to me, although I loath the whole idea of it.)

All of the cycles and elliott wave aside, just take a look at a chart of the Qs with 10, 20, 30 and 50demas. It is the best looking uptrend since the second half of 2006 in my opinion. That uptrend lasted 4 months before a pause. Corey Rosenbloom at Afraid To Trade has shown charts of intraday trend days many times. On such a day it pays to ignore sell signals and ride out the trend. We are in such a trend on the daily and perhaps weekly charts and it will pay to be skeptical of sell signals and ride out this trend.