Too Many BEARS...
The market has failed to pullback like I had hoped it would do, but instead has chopped sideways to frustrate both bulls and bears alike. Now we have too many people looking for that pullback to get long at, so odds are super low that it will happen. Instead we are likely to grind higher, out of this range, into early next week.
Then a pullback into the same range again into next Friday, May the 8th... which will be the last spot to get long before the non-stop grind upward happens into June 5th or so. It will be a slow but stead grind and will frustrate everyone on both sides. It will be designed to put everyone to sleep, and once we see 7600+ we'll see the bears finally give up and become bulls.
Then once everyone starts calling for 8000 we'll top out before reaching it, and then the top will finally be in. When we finally see it do its' first decent pullback the bulls (and bears) will "buy the dip" expecting 8000, but it should only bounce small to put in a lower high and continue down again. At some point it will complete a sneaky, not noticed "A Wave", and the B Wave up will be short lived, and possibly only 50%... which is uncommon in bull markets as they usually do at least 61.8%, but it won't be a bull market at that point.
The pattern "could" be like the 2020 crash, which saw the A Wave down retrace to the sideways chop zone back then, and bounced maybe 50% for the B Wave. If that happens we'll see a drop back down into this 7100's area, then a fast 3-4 day bounce, and then the C Wave down will start and take us into July where I think we'll see a new FP on the SPY of 600.14 get hit. Notice how that will be lower then the March low, which will be similar to the 2020 low being lower then the prior big low in December of 2018.
I don't know for certain that it will follow that pattern, but the cover of the 2026 Economist does show a sharp drop after the final high, so it's going to be fast and will be follow one pattern from the past, or another that has a sharp drop. For now though I'm just sitting on my hand, (wishing we had a good pullback), looking for the May 8th pullback to get long at.
Have a great weekend.
