Pushing higher

Markets are not looking back and the S&P 500 is trying to push above the overhead resistance in the 2300-2350 area. Meanwhile the Dow is trying to get away from the 20k level, which is the final step we want to see if this market is to climb further. This is a do or die point. Here is the current S&P chart:

The sideways price action since December is giving way to a new upward thrust. The move could still fail at this point, but a climb above 2350 would quickly change the odds towards the more optimistic scenario given in my recent Dow 32k article. Then a final sharp blow-off rally stage would become the base scenario.
The Earl (blue line) is neutral and could go either way. The slower Earl2 (orange line) appears to be making a shallow bottom, which would bode well for a further advance. We will also start a new lunar green period this week and that could fuel a further advance towards S&P 2500-2600 this summer.

What could go wrong? Well, the S&P 500 may fail at this 2350 hurdle and that would probably lead to a sharp pullback. The LT wave for February peaks today with some carry-on strength until the 15th. We don’t want to see strong gains that are given back by the end of the day, because that would indicate strong selling near a top.
All we can do at this point is watch carefully and be ready for both scenarios. Once we get a real breakout or a failed breakout subsequent price action will become more clear. I will be posting updates on my twitter as events continue unfold.