Once the target got hit, the market can either form a new accumulation range, higher, for an equivalent time duration, or if it doesn't have enough steam to trend in this way, it returns to the signal mode, or accumulation range from where we previously broke out from. The trip back to it usually takes the same time that the uptrend duration had, as a possible time duration for the rally.
The SPX chart is crystal clear in this regard, and we can see that it obeyed all the 'Time at mode' rules with precision, giving us great trades if we're brave enough to take them, even while going against the majority of traders. Now, that we have landed on support, we had a massive run, that managed to break above the 'distribution range' from where the decline took off, crushing and trapping all bears, margin shorts, and traders who were sitting on the sidelines, sitting in piles of cash until the elections, or before, due to 'poor valuation multiples', bad weather, crude oil's decline, ISIS , Trump, Brexit, Deutsche Bank fear, etc.
All this negativity reached the zenith here, and we had enough 'despair' to form a bottom.
Since we broke above the downtrend mode, the aforementioned distribution range, prices can now proceed to fulfill the downtrend's range target, but to the upside, giving us an intermediate term target at 2228, where I expect prices to stall for some time. If we don't stall, we'll see a continued rally, possibly hitting 2500 in the longer term. For this to happen we need another big fundamental catalyst, else we'll stall once the target is hit, which is the more logical outcome here.
Conclusion: stay long, specially if you bought below 2100. There will be plenty of opportunities in undervalued companies too, so don't miss mine and Tim West publications, contact me for information on the signals service, or mentoring, and don't forget to check out the Key Hidden Levels chatroom for some free market commentary every day.
I hedged my SPY buys from 210 with SDS today, shorted MU, and added some names to the long book, still net long equities. Buying positions in UGL and UCO tomorrow possibly.