SPX where is the trend

(NUMBERS ARE UPDATED)

During this correction or bear market, SPX has found strong support at .38 fibo (start from 2003 bull market). Now SPX has retraced .50 from Dec high, it is important to watch where it goes next week. Will it retrace to 0.5 (1423) or 0.68 (1460) from Oct high before pulling back? Here is a simple prediction: SPX touches 1423 next week and pull back to 1345 and then goes up to 1460, before it starts a big C wave down to a long bear market. Next supports should be 1170 and 1075.

Although I have bull bias, I don't know what can push market to a new high at this point. Current rally could be fueled by value investors, particuarly in previously beaten up sectiors such as retailers, financials, real estate, and transportation. We need growth companies to lead the market to new highs, but value stocks clearly had an upper hand in January. Earnings are not encouraging, and many stocks were sold off hard with good/reasonable ERs. With all the impact from layoff and slowing comsumer spending, it is difficult to remain as a strong bull in 2008.