S&P 500 (cash) near term outlook:
Big picture view from early March of at least a few weeks of correcting from the Mar 1st high at 2401 (wave iv in the rally from the Jan 23rd low at 2257) and with eventual new highs after (within wave v) remains in place. In the Mar 24th email warned of potential, near term volatility on the US health care vote. The market did indeed pop lower, reaching that long mentioned bullish trendline from Dec (then at 2322) and before rapidly reversing higher. Though further gains above that 2401 high are still favored, that bearish trendline from Mar 1st (currently at 2378/01) may provide a few days/week of consolidating first (see in red on daily chart below). Nearby support is seen at 2348/51 and that bullish trendline from Dec (currently at 2327/30). A final note, though gains above 2401 are still favored, the magnitude may be more limited (and versus the start of a more major, new upleg). The market no doubt remains overbought in the bigger picture, lots of longer term resistance lies just above (see longer term below) and that series of 5 months spikes higher in the vix occurs again over the next few weeks (see 2nd chart below). Bottom line : gains above that 2401 high still favored but the big picture magnitude of further upside is a question.
Strategy/position:
Reached the buy target from the Mar 24th email at 2325 on Mar 27th (3 pts above the bull trendline from Dec) and for now, would stop on a close 3 pts below. However, with gains above that 2401 high potentially limited, will want to get much more aggressive in such upside (to reflect that risk).
Long term outlook:
Long held view an extended period of broad ranging higher (at least another few months) but with the pullbacks becoming more significant as the long term upside momentum slows, remains in place. Note as discussed above, the upside pattern from Jan as well as Nov and even last July (currently within wave 3) are still not "complete" and in turn argues a further period of "net" upside as these patterns unfold. But with the market very overbought after the last few years of sharp gains and nearing lots of longer term resistance, use the term "net" as the bigger picture upside is likely to become more "difficult"/limited and thus the expected period of a broad, ranging higher (with increasing pullbacks). Lots of long term resistance is above that Mar 1st high at 2401 at the rising trendline from Apr 2016 (currently at 2323/28) and the very long term ceiling of the bull channel from 2009 (currently at 2455/70, see weekly chart/2nd chart below) and adds to the nearer term view that bigger picture gains above 2401 may be limited. HoweverBottom line : still favor at least another few months of "net" upside, but with the pullbacks along the way potentially becoming more significant as the long term upside momentum starts to slow.
Long term strategy/position:
With further upside likely to become more rangy (as the longer term upside momentum slows), will generally stay with that approach of waiting for bigger picture pullbacks to buy and then being aggressive with stops on gains.
Current:
Nearer term : long Mar 27th at 2325 for gains above 2401.
Last : long Mar 10th at 2369, stopped Mar 21 below t-line from Nov (2370, closed at 2344).
Longer term: min few more months of upside, likely to range higher (good pullbacks along the way).
Last : same as shorter term above.
