Market Update…. Bears last stand?

 
 

Well I must admit that the strength of this rally has caught me a little off guard. What I am looking at as a potential “last stand” for bears is the OEX (S+P 100 index). I’ve mentioned this chart in previous posts before, it now becomes crucial for bears to defend as it remains the last significant resistance area for the near term.
 
The top chart is the OEX monthly chart showing the divergence between it and the S+P 500. As the S+P 500 trades at all time high levels the OEX has just now come into it’s 2007 high. Also as confluence we have a measured move target projection just a tad above that significant high level.
 
The bottom chart shows this more clearly, it is a daily chart of the OEX off the 2011 lows showing two separate but distinct bull market campaigns. It seems to me to appear to be 2 separate bull market campaigns. The first came during the 2011 low to the May 2012 high consisting of a 100 pt rally off the low, a 60 pt correction with a final move up of 120 pts.
 
The second came during the June 2012 low and seems to be on it’s final stage (hopefully!). Again we had 100 pt rally off the June 2012 low like in the last bull campaign, followed by a 60 pt correction. Now a 120 pt rally to match the size of the end of the previous short term bull market campaign projects a high of around 737.35, right in the vicinity of the 2007 OEX high as well.
It’s because of this I am still holding out for at least a correction of the size of May to June 2012. But the strength of this market and the lack of volatility even at new all time highs for the Dow and S+P 500 has to make one cautious on the short side.
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