The SPX broke out above R2

which I think will launch the SPX to R1 at about 880. That's 5.7% above where we closed today. If the SPX moves straight up to R1, I will miss the ride with my accounts not managed by mechanical methods. I'll assume that the downtrending channel bound by R1/S1 is going to control this market until it doesn't, which means to me that this is still a bear market rally. Therefore, I should err on the side of caution.

Look at the chart above and assume

that I chased the market and bought in at 850 tomorrow. Then imagine R1 turning the market down all the way to S1. Well, that entry at 850 would look awfully foolish in hindsight considering how close it is to R1 in an ongoing bear market. Technical analysis is easy in hindsight so I think considering how hindsight will appear if things don't go as planned is a useful exercise.

What I'd like to see is

the SPX run to 880 (R1) in the next week or so and then about a month of consolidation with the SPX bouncing between R1 and R2. To me that would indicate the sellers just cannot push the market back down to S1. And more points on R1 in either direction make R1 more significant and the channel's influence more likely. S1 is also strengthened simply because it's a parallel counterpart to the well-defined R1. I'd hope to get some directional clues during that consolidation period and position long depending on those clues.

Then I'd like to see the SPX

blast above R1 to about 950, then correct back to R1 in a retest and very obvious buying opportunity at about 850. If that were all to occur, I'd expect the SPX to run to over 1100, which is a move similar to the width of the R1/S1 channel. This move could still just be a bear market rally but as the market moves higher, long-term investor opinion shifts to bull market "buy the dips" mode. Then the old highs (~1550) will start pulling the market higher as opinion becomes that "surely" this new bull market will make all-time highs.

Of course scenarios rarely

play out exactly as for what you wish. So as of now, I'm simply willing to miss out on the move to 880 and buy the pull back which could drop as low as 800. If I don't get that, I'll just have to wait for a post R1 breakout retest of R1 up higher. If I don't get that, I'll face what I believe to be the toughest decision that exists in market timing. When do you give up on a pull back and chase the market?

I've faced it many times before,

which reminds me that I need to revisit the historical significance of when indexes move X% above their Y-day moving averages. I believe with today's close the Dow Jones Industrial Average will be about 9% above its 21-day moving average. This is rare historically and implies great strength. Maybe the type of strength worth chasing. But considering recent volatility, measures like this compared to historical norms may also be temporarily meaningless. Or maybe I can get something interesting to reveal if I normalize with the VIX. Just thinking out loud... I will do some testing, form an opinion, and report back.