Roadmap for this week

Our view is that we’re in an ending diagonal and in the very last stages of this 5 wave move that started on March 6th.

Since we had a turn date on March 26th, there is a likelihood that this wave could truncate and we may have seen the highs on Thursday. Alternatively this last leg could extend upwards to as high as the 832 to 840 area and then begin a move down. Either ways, be alert to the possibility that this market is toppy and could be headed down.

With Germany the U.K and U.S seemingly on opposite ends of the spectrum there is a likelihood that the market will be disappointed by what is viewed as the last chance for coordinated policy to take effect. This could be the catalyst that takes the market lower immediately.

On the other hand, we have a proposal on Mark to Market accounting for April 2nd and the market could rally into that meeting.

Investment Strategy:

We shorted into the close on Thursday and took profits Friday morning so that we were flat over the weekend. Allocate 1 unit for every ten point move higher on the S&P.

Short term target: 770.