As I was writing before, the market is on the edge right now. The current situation is similar to one, when S&P 500 was trading at 800-900 level (if you check out my posts from that time, you’ll find out that I got burnt pretty badly). Even though the market seems to be overbought, nothing pushes it down and every minor dip is being bought. This is a real nightmare for bears.

My projection is that we’ll see another big push higher, maybe to 1030-1040 area. Otherwise we might pullback to 970-960 and then continue higher. This will depend on market behavior at the beginning of the coming week. If we are going higher, then I believe the move up will happen really fast, it will be a capitulation move for the bears. Looking for shorts will be a good idea after that.

Another interesting fact is that NASDAQ is quite outperforming S&P 500. The tech market has already made back 50% of its losses made from the top (see the chart), when the  S&P 500 has more than 100 points to go to reach the same area. So, this time general sector must outperform tech stocks.

Also take a look at GOLD and currencies, as they might give you idea of where the money is going. We are forming a nice base in bouth GOLD and EUR/USD, ready to break out large. I will post more detail in my next post.