The market rally as I thought it would but it went higher then I expected. In fact, the Nasdaq put in a new all time high while the SPX/ES got really close. The DOW went down so this is a clear case of sector rotation with no strength or volume behind it. But, that also means the downside is very limited so it's not looking good for my thoughts of a C wave down into the 5900's happening in the coming days.
Of course it doesn't mean we can't pullback some as the short term technicals just don't support another big squeeze higher today and/or Friday to 6150+ for some blow off top. What seems most likely is some back and forth movement over the next several days (or more) to keep the market in a range of "below the all time high" and "above last weeks' low".
We could take out the 6039.75 low I guess but I don't see any really strong C wave down happening. It might look like the 8/19 to 8/28 period where there was a lower low put in (on 8/28) but it wasn't that deep. It would be like down to 6000 "maybe" now? If it follows that period then today will be choppy and Friday will be like the 8/28 day.
Or it could play out like the 10/14 to 10/23 period where again there was a lower low but not a lot. The 10/30 and 10/31 drop was a good sized one, which would be like going into the low 5900's as I suggested in yesterdays post. It's still possible I guess but it has much lower odds now that we've put in a higher high on the Nasdaq as that really decreased the chances of a deeper drop.
Have a blessed day.
