Back to normal, people have forgotten about recent misfortunes, and Markets resume their normal course...Forgive my cynicism...Indices are heading where signals indicated they should a few months ago.

Several Equity charts around the world are showing positive development with some breaking key resistance, while others accelerating from their tight range. As predicted, commodities continue their rally to break key level, and the dollar index is closer to 2008 low...No change to my conclusion: Keep the long in Equity, with Japan, European charts waking up... 


S&P 500 Monthly Chart:

The S&P is on the verge to break the last resistance (62% Fibo retracement of the 2007 top-2009 low). The momentum is still up, but the chart is overbought. Though we may see a correction, the odds of reaching the 07 top are higher.
Keep your long, with the 1550 target in mind. 
Now the question is when to sell? At 1550?...Some advocate a % of correction, I prefer simply when... there is a sell signal, or if you want to preserve more gains a sell warning...




Russell 2000 Monthly Chart:
The Russell 2000 index, (representing 2000 small US cap) is breaking 2007 highs, with upward momentum.
However, we need to monitor if the break is not a trap, as there is a warning in the weekly chart.
The negative divergence, a pattern highlighted couple of months ago on Asia, is characterised by increasing tops (2007, and 2011) with declining top on the momentum indicators. See next chart.


Depending on your style, you could take profit now, with the risk that the warning signal is not confirmed (like in Asia) or wait for a sell signal... But that means less profit....Compromise, compromise.. C'est la vie...

Russell 2000 Weekly: Negative divergence
If the warning is confirmed, by breaking the 20 week moving average (grey line), 760 is the target








Nikkei Daily Chart:                                                                                                               

More than a month after the earthquake, the Nikkei bounced back and has been in a tight trading range. It is now breaking up, a prelude to rally, back to the 10300-500 area, my target being 11000.












The Dollar index (DXY) monthly chart:

The DXY is now below previous low of 2009, and is now heading towards my target of 2008 low. The index is oversold, but with a clearly downward momentum.
This 2008 level is probably a buy level...To be monitored


Conclusion: Keep the long on Equity, Commodities. Keep the short on dollar. Stay away from the Bonds... Happy Trading...