Yesterday I was thinking about shorting at the close but decided not to as it just felt that the market wasn't ready to rollover yet. Now that we are up some in the pre-market I'm glad I made that decision. I think we need another strong up day of 20 or 30 points to squeeze out the last bear, exhaust the bulls and hopefully fill that gap overhead. We might not get it today though as the short term charts look pretty overbought right now, so possibly we pullback small today and reset them and make another attempt tomorrow.
The bottom line here is that I'm looking for a move higher to close that gap before I think it will rollover. But it's also about "time", as if the bulls pullback some first (like to 2700 or so) before closing that gap then the next move up could have them "rebooted" with more energy and therefore they could go up higher then just that gap. If you are a bear you really want the bulls to exhaust themselves on the move up each day until they fill that gap. A strong down day before that and the bulls will reboot... not good for the bears. This gap needs to be filled this week I think, and the sooner the better.
Give me a gap fill and then I'll be looking for a 80-100 point down move to follow into the end of next week. As far as wave count, I'm leaning toward the move up from the 2700 recent pullback being a 5th wave of some degree... versus that 2740 to 2700 drop being an A wave down and a B wave up to the present. All I need to see now is that 2740 recent high get taken out and that would kill the ABC wave pattern and support the 5th wave as being most likely correct. Regardless of the wave count short term chart are getting overbought so move down is near. If we don't see that gap filled today then I think we'll see it tomorrow as overbought charts should reset to neutral by the close today if we chop around and don't go anywhere.