No, not in a “saves the world” sense.  But, he must have received my envelope full of liras because SPX is right on track to reach our target from the 4th [Counting Down, 3:30 update]. We’ll get into the specifics of his plan later, but first some charts.

We’ve reached 1417.59, the 1.272 of the two targets in the little Butterfly Pattern.  The 1.618 extension is still up ahead at 1423.31.

continued…

I suspect we’ll reach it, as it represents the .886 of the larger pattern (from 1426 to 1396.)  I will go short there, with stops slightly above.

More in a few minutes.

UPDATE:  10:05 AM

That didn’t take long.  I’ll try a short position here at 1423.35.  These things rarely stop on a dime after a 20-pt ramp, so I’ll use a fairly loose stop of 1426.

UPDATE:  10:30 AM

The dollar isn’t selling off at all, this morning.  Usually, currencies know better than equities; so, I’ll take this as supporting evidence that the equity ramp will fade.

Non-manufacturing ISM just came in above expectations — won’t help the Fed’s QE case.  More details in a few.

I’m inclined to give SPX a little more leeway vis-a-vis the 1426 stop — especially if there’s negative divergence setting up.

10:35 AM

Negative divergence on the 1-min and barely there on the 5-min.  Otherwise, nada.  I’ll pull the plug and probably try again at 1433.  If we reverse earlier, I won’t wait.  I’m miffed at having sold too early, but a nice short entry would make up for it.

UPDATE:  12:30 PM

The market has stalled around 1431 — just shy of the next harmonic target at 1433.  This represents the 1.272 of the 1356 to 1074 decline between July and October 2011 and was discussed in detail back in March [see: All the Pretty Butterflies.]

There were three Butterfly patterns at the time — each of which was arguably valid.  The lowest one (in red, from 1347) played out first, though, when we got a reversal at 1422 — the 1.272 of that pattern.

Since we’ve twice exceeded the April 1422 high, there’s a very good chance we’ll take a run up to the next higher Point D — the 1433 level mentioned above.

If we should blow through it, the third pattern (in yellow, from 1370 in May 2011) features a 1.272 at 1351.  Note that there are 4 harmonic targets within 10 points of that level, including the 1.618 of the smallest Butterfly Pattern established in the past three weeks (1445.39.)

More in a few.

UPDATE:  2:55 PM

We’re still stuck in the 1429-1430 range.  I’m going to go ahead and sell here at 1431 and go short, with tight stops at 1434.

 

UPDATE:  3:35

I’ve been looking at channels and harmonics all day.  The sense I get is that we’ll probably top out around 1450 next week.   I’ll post these charts after the close.  But, I think we’ll get either a dip or reversal somewhere between here and there.

Much of today’s upside and volume is short-covering.  Witness the fact that the dollar has moved less than .5%, VIX is finding support at price and RSI channels, and the euro — the supposed beneficiary of Draghi’s largesse — is bumping up against overhead resistance.

The other indices I follow are all at or very near important targets.  I have NDX at an interim top (at least) of 2830-2842, COMP at 3135-3145, the DJIA at 13,333, RUT at 834-840, and NYA at 8140-8200.

But, if we go strong into the close, I’ll close out my short and go to cash.  Too many times in the past few months, strong closes have had follow through the following session.