At quarterly chart level price has tested the underside of the previous return trendline that was formed by the 1937 and 1966 peaks. With 4 tests, the trendline is considered significant and now acts as resistance to further price advances. Unfortunately it's difficult to use the trendline as a short entry mechanism due to the fact that it continues to rise with each passing quarter. Hence, one needs to wait for confirmation that a change in trend has taken place.
Dropping down to the monthly chart level, my preferred wave interpretation is an expanding triangle. Two upside fib extensions are based off the 12/1974 low, the w.b crest and to the 2/2000 peak... projected off w.c. The nearest price objective at this juncture is 14892.11, a stones throw from the recent peak.
While there is no guarantee that price will reach upside objectives, the take away is that the advance off the 2009 lows is maturing. Each advance exposes a long position to a higher probability of a significant decline. Just as metal investors were complacent, full of greed and lacking of discipline, so to will the crowd be in equities.
I'm currently focusing on identifying possible reversal patterns that will identify a major top in this market. There are many signs of technical weakness. You'll find them if you do you homework.
Best of Trading
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