In my July post I mentioned there is an outstanding 9 year FLD target for the $SPX. It stands at 2150. It seems hard to embrace this possibility but it may well be that the $SPX will be the last man standing when these markets finally set their tops.
The interesting thing is that the 9 year FLD has accurately predicted price targets since the 2003 lows. The 2007 high and 2009 lows very achieved with the 9 year FLD as a forecasting tool. Actually the 2007 high was just shy. On the daily chart price crosses at 1183 in late 2005 on a dip not seen in the weekly chart. The target given was 1600 ish vs the 1576 achieved at the 2007 high.
Looking at the current daily charts, by any measure one has to conclude that we saw the 40 week low last week. It is late in its arrival which is a sign of bearish things to come. If the 9 year high target of 2150 were to be achieved in the coming 40 week cycle, the current arrangement of FLDs would likely require the $SPX to break to new highs sometime by late November. BTW, I tried to get Sentient to accept the recent low as a 40 week low. No dice.
The bottom line is that I would not be shorting the $SPX here. If you cannot bring yourself to go long on a pullback, I suggest standing aside until things clear up. Once this current rally is over and tops out, ideally to new highs, it will be chaos for equity markets thereafter.