Thanks for your patience today.  I’m taking advantage of the OPEX dulldrums (sic) to take a step back and evaluate the big picture.

Yesterday, in another low-volume meltup, SPX exceeded my 1411 target by almost 7 points.  Recall that 1411 was supposed to be the level to which the market would run if it slightly exceeded our 1404 target from back in mid-June [see:  OPEX Games & Fed Up Yet?]

My thinking at the time was that if we rallied all the way from 1314 (at the time) to 1404, the fan line from 1576 in October, 2007 would present a very tempting target at 1411.  Here’s the chart from June 20:

At the time, I also thought the neckline (yellow dashed & solid white lines) of the April-May H&S pattern would come back into play down the road.  The neckline played into my expectation of tagging the .786 Fib at 1389 by July 5, which of course it didn’t do until July 27.

I didn’t save that particular drawing set; but, here’s a very similar one I saved later that day with current prices applied.  The neckline did, in fact, come into play, but at the .886 of 1404.64 instead of the .786 of 1389.

more in a few…

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For those who didn’t catch it, here’s a terrific interview with ECRI’s Lakshman Achuthan on Bloomberg about a month ago.  In it, he discusses what exactly is a recession and why we’re already back in one — even though the MSM hasn’t recognized or acknowledged it.