Different charts show different pictures depending on how the values are calibrated on either the x or y axis, or in relation to each other. Also some charts show every move on the day, others only closing values and so on. So here is the S&P (SPX). 3 times.  The high point is at about 1450 once the trend line is reached. Obviously a throw-over is always a possibility but, for the sake of argument let us assume perfection. The S&P is presently at about 1435 and the Dow has already marched on to a new post crash high. So is the DAX. Most other indices are still well below previous levels and certainly not within 7% of their all time highs. Over the next few days we will have a QE3 announcement, the German Constitutional Court pronouncing on the legality of the ECB plan, Dutch elections, more fuss over Greece and perhaps a few additional infusions of stimulus by China and India. All this should be sufficient to add the needed 15 points but the big question is if it will stay there.

See also a previous blog on the S&P (SPX). Though we never ever expected the S&P 500 to rebound to these lofty levels, and take almost 4 years to do so , we do find this pattern very intriguing now that we are here. Over the past two years this index seems to have traced out a pretty classic diagonal, that is a wedge. The wedge is moreover of approximately the same height as the move in the first nine months of the rebound. This makes for a very symmetric A-B-C pattern forming a B-wave.. It travels fairly precisely to the level of the B in the preceding large down drop (the great recession). What it tells us is that the S&P may be in for a big disappointment soon. As always if this does occur a minimum expectation would be for the index to fall at least halfway down this chart.

We would sell all stocks that do not have a clear positive outlook !