The breakdown out of the Pennant is still intact. IMO the strong Yen was the thorn in the Fed's side. No matter how much money they threw at the markets as long as the 1.2 trillion in carry trades were unwinding it wasn't going to do any good. Now the Yen is correcting the last advance. As long as this continues then I suspect the market should continue to drift upwards as the Fed unloads massive amounts of liquidity on to the markets. The key words here are "drift higher". The problem is that a great amount of this liquidity is leaking faster and faster into the commodity markets. When inflation starts to rear it's ugly head money will start to gravitate towards real things and away from paper assets. Sound familiar? Like maybe something we've been seeing for 6-7 years now. Only now it's starting to accelerate. ouch!
I will be watching for the Yen to approach that long term uptrend line and reverse as a sign to intiate shorts again.