Get ready to Buy-Buy-Buy on Wednesday or Thursday - $SPX and other U.S. stock indices

Get ready to buy and be long the U.S. stock indices either tomorrow (Wednesday) or Thursday - giving the market the benefit of the doubt that it's about to kick up hard in a wave "3 of 3 of 3". Technical analysis shows that the overbought conditions in place at the end of last week are working off, and we're close to testing important support. If you read Tony Caldaro's update this evening at http://caldaro.wordpress.com/2011/05/03/tuesday-update-282/, then you know the working assumption is that the market is close to a low that will send the market strongly up. A sure thing? Well, nothing's ever 100% sure, but it's far better to give the market the benefit of any doubt and don't position against this likely massive move up.

Below are Tony Caldaro's basic $SPX chart (from his public charts site - thanks again Tony!), followed by my weekly and monthly $SPX charts. The indicators show that there's plenty of ability for the markets to engage in a significant new upswing. Don't let talk about the dollar deter you. There's plenty of evidence that the markets can move up when the dollar strengthens, it isn't always an inverse correlation. Besides, if it does take a weaker dollar, there's still a good chance the dollar will make a significant move lower - thus I can envision stocks moving up whether or not the dollar plunges.

So keep an eye out to reenter long U.S. stock indices (and perhaps names like Apple and Google), if you've been looking for another buy point. It's time to look for that tomorrow or Thursday, and quick-moving traders should be watching hourly and 15-minute charts since the reversal-producing low may well occur intraday. What if we're wrong? If the market fails under $1330 in the $SPX that would be cautionary, but it would take a drop under $1294 to erase the bullish forecast and go bearish instead. So above that level, the best approach is to play this from the long side.