Note:  only six charter memberships are left as of EOD Thursday.  I’ll keep this going until they’re gone.  Congratulations to E.J., P.B. and T.J. for locking in today’s annual rate for the life of the site.

* * * * * * * *

Well, we got the rebound we were expecting…although it was a little unnerving.  As I posted at 10:30 yesterday — with SPX down 16 points at 1315:

We had a similar dip the day before Q1 ended, too.  March 29 opened at 1405, dipped to 1391, and closed at 1403.  Money managers like to end quarters on an up note whenever possible.  This feels like a fake out.

Sure enough, by late in the day we had rebounded to within 2 points of the opening, just like on March 29.  More importantly, we were right back on track with our forecast (the solid yellow line.)

Likewise, the dollar caught up to our forecast (solid yellow line) in one fell swoop.  I was getting a little nervous, watching the growing divergence over the past few days.  The previous H&S was in danger of being busted; and, although we kept one foot on the long-term channel line, we were moving further and further away from the presumed right shoulder target.  No more.

 

The pattern over the past 10 sessions suggests we’ll top out this morning at 1357.28.  That’s a Bat pattern retracement from the June 19 1363 high.  I’m also altering our forecast going forward.

continued…

A few days ago, it looked as though we’d probably go through a little pull back around the .500 Fib level at 1344.  Here’s the previous forecast:

Obviously, we got the pull back out of our system yesterday — in spades.  And, we exceeded our previous interim target.  But, the past ten sessions have traced out a nice looking Bat pattern that completes at 1357.

So, I’m slightly altering our forecast to incorporate an interim reversal (perhaps even today) at the .886 for a complete Bat.  I anticipate the Bat will then extend into a Crab pattern whose 1.618 extension targets 1396.95 — the exact midpoint of our 1389-1404 target range.

Here’s the new chart:

We now have five different reasons to feel good about our target range:

1. the Gartley pattern completion at 1389
2. the Bat pattern completion at 1404
3. the trend line off the Apr 2 1422 high
4. the inverse H&S target of 1404
5. this new Crab pattern target of 1397

My biggest concern isn’t whether we’ll get there; it’s what to do if/when we do.

Let me explain.  The euro mess is most definitely not fixed.  They are papering over the bad loans failing banks have made with more bad loans to said banks from a monetary authority that derives its capital from the money printing of sovereigns whose bonds are being propped up by these same failing banks.

If that seems confusing, it’s not.  Think of it as putting your AMEX payment on your maxed-out Visa card.  For now, at least, the world seems willing to ignore the dire medium and long-term implications and pretend everything is better.

It’s certainly in the financial community’s self-interest to do so.  And, the government numb-nuts get to pretend they’re doing a good job that much longer — maybe even get reelected (with campaign dollars from their friends on Wall Street.)

Eventually, someone will call BS on the whole scheme and it’ll come crashing down in a jiffy.  I honestly don’t know when that will be, but I think about it a lot.  Until then, we’ll keep trying to see around the next corner and make a little money here and there.

GLTA.

UPDATE:  2:30 PM

Just hit our 1357.28 target.   As discussed earlier, this is a natural spot for a small pause — probably 1342-1345 at the most.   I’m guessing the solid white channel line just below.   This is also the midpoint of the RSI channel.