Wednesday, May 14, 2008

Where next?

At the start of February after breadth indicators reached all-time lows I gave a guesstimate as to what the S&P would do over the coming months. Other than the larger than expected dip in March it has remained relatively ontrack:

But where does the market go next?

S&P Breadth indicators are getting a little toasty which favors some modicum of weakness over the coming weeks. This would shake out the weak hands and leave the index better prepared for an upside break of the 200-day MA.

The alternative is a straight break and run - with barely a pause at the 200-day MA.