the moment of truth has arrived

Earlier in the week I mentioned that I thought the S&P was forming a running correction. Happy to say that the first target out of that pattern of 1420 was met last night. There is a higher target out of that pattern of 1454. I still believe that my idea that the market was forming a three peaks and a domed house pattern is very much alive. So while I'm happy that the market is following this nicely, this area ceates a few worries for me. The S&P has now pulled right back up under its overhead resistance and directly above here the 89 week MA average comes through. I think Jaolsa was mentioning the 90 week MA weeks ago as a target area. As well we are getting a fair way from the 55 day moving average which often means a correction isn't far off. But at the same time there are some jolly nice things happening in other markets as I also mentioned earlier in the week, in particular Canada and Brazil. Brazil continued its move into new high ground overnight and now has excellent support below this area on any correction.

So is this one of those times that one should just shut ones eyes and let the market do its thing, or are we close to another correction? I try and stand back from the market a bit these days so I guess I have to see how the S&P behaves this week.

I wish we could have a thread on XJO just for longer term thoughts on the markets. XJO is really the only place on Hot Copper that there is serious and researched ideas on the big picture but the longer term thoughts can get lost in the short term trading action. Perhaps there is space for both.