Technically, SPX reversed yesterday at the 1.618 extension of the drop from 1576 to 666 between Oct 2007 and Mar 2009.  In an unrigged world, we’d call the move from 1810 to 2143 a truncated 5th wave and get ready for a massive sell off.  But, with more and more talk of helicopter money in Japan, and rapidly rising CL and USDJPY, it’s hard to imagine.

continued for members…

Note that CL is on the rise, and has room for a nice backtest of the purple channel. USDJPY is backtesting the white channel at the falling red channel midline and a .618 Fib.  Not a recipe for big gains.  So, while there’s plenty of reason to expect the breakout to continue, I’d argue for caution — especially any time SPX dips below 2138.  It has already backtested the rising white channel. 

So, they might decide to consolidate it a bit before pushing higher.  The SMA 10/20/50 are bunched tightly at 2078-2086, and would make a nice backtest point.  If they push it on through, there’s clear sailing up to a confluence of channel points at 2180ish.