The market has been in the process of a near 13 Fibonacci week corrective rally since the October 4th 2011 lows at 1074 on the SP 500. So far the highs reached on the initial rally of 218 points were in October at 1292. That has remained the high water mark as we have consolidated over the last many weeks. I expect the market to complete this counter-trend ABC bounce during the Dec 27th-29th window, followed by a good sized correction into Mid-January ahead of the earning season.
The patterns that I am seeing are based on crowd behavioral "Elliott Wave" analysis that I perform at my TMTF and ATP services, and this analysis now favors a 70% probability of a bearish decline beginning very shortly to the 1150's area on the SP 500 index. To wit, Investment Advisors in recent surveys have over 45% Bulls and only 30% bears with typical tops forming around 47-48% Bulls in surveys. In addition, the rally has been on light volume and recent action seems to be forming a rising "bearish wedge" pattern at the same time.
Reversals in the market often come when few expect it whether they come near bottoms or tops. My most recent forecasts called a bullish turn after Thanksgiving Day when most were bearish in the 1160's on the SP 500 index. We then rallied 109 points to a 1267 high, which we are re-testing now. As we recently pulled back into the low 1200's, I again said to watch for a major market turn on Dec 20th. We then immediately rallied so far into the 1270 area from the 1203 lows.
Below is a chart I sent to my subscribers on Dec 24th, having projected a continuing rally into the 27th-29th window of trade. If you'd like to benefit from our market turn calls and crowd behavioral based pattern analysis on the SP 500 and Gold and Silver, check us out at www.MarketTrendForecast.com to sign up for our FREE FORECAST or GET 33% HOLIDAY DISCOUNT ON OUR PREMIUM GOLD AND SILVER FORECASTS.