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(4/22/17)
So far the action, in the S&P 500, since early March looks
like a consolidation pattern and not the start of a larger correction.
Meanwhile the VIX still hasn't rallied back to its downward trend line which is
around the 19 level. At this point, even if the VIX reaches the 19 level,
the S&P 500 probably wouldn't drop much below its 100 Day Moving Average
(green line) which is nearing the 2310 area.
Meanwhile, based on Wave analysis, the Dow has the clearest
structure as the current pullback would be a 4th Wave. This would then be
followed by one more significant move higher to complete a 5 Wave pattern from
the early 2016 low. The final target price based on Fib Extensions would
be around 22000 (261.8% Extension).
Finally, one thing that is a bit troubling is the 5 Day Average
of the Put to Call Ratio has been dropping (points a to b) as the market has
been pulling back. Normally the Put to Call Ratio would rise as the market
drops and vice versa. Thus investors seem awfully confident the market is
just going to head higher again. Keep in mind, during the past few years,
significant rallies in the market didn't develop until the 5 Day Average of the
Put to Call Ratio spiked above the 1.2 level (points c).
Amateur Investors
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