SPX in a symmetrical triangle formation

SPX traded to 1363.71 near to upper trendline resistance then closed at 1360.03 with a triangle formation. As shown on the ew chart in additions to other previous comments which noted earlier, markets are showing positive divergences after the significant intermediate correction which noted going into the start of the correction. Since then, we have, as the Fed noted today as shown below and as noted earlier financial sector crisis after the R.E. top in 2005; nevertheless, markets and economy is relatively sustaining "Stability" without major crisis as we are seeing in certain sectors.

It is extremely easy to be a bear at this time as most of us are familiar with the fragile market sentiment which is going on since Feb 2007 after real estate market has topped in mid 2005.

Markets have gone through a few heart-attack like situations during the last 12 months; however, emergency, preemptive actions taken by the Fed have stabilized markets being totally dead, breathless after actual heart-attack like situations, a.k.a. market crash.

Redirecting to the excessive pessimism, as noted, it is very easy to be a bear at this juncture; however, markets are still at a point where counting on the last hope that we are not in a bear market as the last support area to keep the upside target to near SPX 1600-1650 area during this year.

It is obvious by now that bearish EW bias is that we are on the way to the completing the wave 5 which could be "A" of a cycle correction; however, considering the factors which noted before I think that we could see SPX 1600 +/- during this year. Of course, this is not the predominant market sentiment, but market level is not dominated my majority opinion, but it often pays off to take positions against crowd sentiment even though there is a trending period when majority opinion will be right. I think that we had bearish sentiment with confirming market price actions during Oct 11, 2007 - Jan 23, 2008 which is a IT correction.

It is obvious that we have some technical damages as we can see on the LT trend lines; however, that is one of the characteristics of Intermediate term correction. In this case, 38% of Oct 2002 rally in 8 year cycle.