I last posted about the overall market here. My record has been pretty bad over the course of this rally, but I'll offer some additional analysis now that we've popped to new trend highs. I believe the 950-975 zone should contain price action, and we should very shortly start a downtrend towards new lows.
The above chart shows the E-mini S&P 500 futures (/ES) over the past 2 years. I think we've seen an irregular flat ABC correction since the November 2008 lows, where Wave-b and Wave-c both overshot the bounds of Wave-a. This excellent scenario prompts the bulls to capitulate the end of Wave-b, and the bears to capitulate at the end of Wave-c because a "breakout" occurs. Ultimately, I think this recent bullish breakout will fail because prior to breaking above 942 (the December 2008 high), a triangle consolidation formed. Triangles normally occur before the final thrust in the trend. It all works out perfectly: the final thrust is Wave-5 (terminal) of Wave-c, it brokeout above the previous high (942), and now we have MACD divergence. When you take a look at current sentiment, it's not hard to imagine why a top is near.