Market Outlook

The market is up a lot as I am writing this. Someone (I do not know who) once said the market resembles someone with manic-depressive disorder. It seems today it put on the manic face.

I explained previously why I was bullish from these levels. Here is a target for what I think will prove to be a rally in the coming weeks:

The target is obtained using the Fibonacci retracement levels. Notice how 1182 is support and 1256 the next target in case of a new high.

The first phase of my trade was establishing a core position at the base of the expected rally. If today's strength holds, the trade will enter the next phase: making small adds to my position on the way up.

These adds will be small enough not to ruin my whole trade in case something goes wrong but also big enough to matter for the bottom line. The total put/call ratio will be very useful in my adding process since it usually accurately indicates when a rally off the bottom is going to just continue higher or pause.