Now that investors "see the bull" it's running on fumes so be careful

After some time away on a sort of "spring break" of my own, here's a look at where the stock market stands. My charts of the SPX, daily and weekly, are at the bottom of this post. You can see there are some signs of the market slowing down, even a little negative divergence indicating some more pullback should come soon. It's ironic since many are finally "seeing" the bull market. Now, any good pullback will be another good buying point for the highs we expect in late May. I'm going to refer next to Terry Laundry's T Theory and Tony Caldaro's Objective Elliott Wave. Tony's OEW site is in the list at right, and his posts feed in at right too. So you can easily be keeping up with his view that the market is reaching a wave 1 top - that's depicted in his SPX charts, I've copied in his daily below (thanks again Tony!).

Next, I'd like to quote Terry Laundry's statements Thursday morning at T Theory™ Foundation: T Theory™ Daily Updates, Forecasts, Charts and Data, http://www.ttheoryfoundation.org/t-theory-calculations.html:

In my last post I set up the Volume Oscillator (VO) pattern to confirm the left side of a "new" Small T using the green triangle cash build up pattern. Now we need to wait to see how the current decline carries out an oversold condition and then cut the heavy green cash build up line to start the next rally in the journey of the 3rd Bull to to reach its May 20 final objective. This may take a few days.

The negative right now is that yesterday's decline did not produce a high Arms number (it was 0.92 in the table) and so we are stuck with the last four trading days having overbought numbers.

If a decline carries the VO below the thin rising green line to a new recent low then either of two scenarios can lead to a new buying opportunity. If the oscillator declines to the green dashed line near "LO" the decline can end either "softly" or "climatically".

A selling climax would require a steep bad day with an Arms around 3.0 to washout the sellers and a quick end to the decline is more likely. A softer low can be made by regenerating a new "W" pattern at a lower level, more along the lines of the prior pattern in the chart, but that takes more time.

Until we have some resolution it would just be a good idea to have some cash available for when the pattern seems to be resolving.

See the higher resolution PDF of todays chart here Download SRTvo20100407pdf

Finally, I'd just like to point out that it'll be real interesting if we see more serious resistance in May at the weekly chart moving averages. Although I don't rule out that the market could give even more surprise to the upside either in May or perhaps August.

Tony Caldaro's OEW chart of the SPX, followed by my daily and a weekly chart: