We got a strong bounce up from the low yesterday, but is the low in? That's a question I can't answer but I really don't think we are going to break the low until we first go up a lot higher first and then rollover again. I just don't think they will repeat the 12/18 low, which bounced and then did make a lower low... then a strong rally followed. I tend to think they will NOT repeat that move as it's too obvious.
Resistance overhead is the "gap window" and of course "gap fill", and I think we reach gap window at the very least. Then we'll see what happens as we should have some kind of pullback there, but I don't know how much. They took out a lot of bulls yesterday that will sell around gap fill as that's where they got stuck at from Fridays close.
Bears though are trapped now so I don't think we will go back down to the low to let them out. I'm thinking we get to gap fill before the FOMC tomorrow (which could be into the close today?) and then we get a pullback of some degree, but there's still a new high very possibly, and it should be 100+ points over the current high to hit the stops.
The SPX cash already has a new high, but not the ES, so I do think we will see one by the end of this week or early next week. Probably by the end of this week as it closes out the month too, and "turns" usually come around the end of any month and/or beginning of the new month. If we can get that last higher high out of the way we can see an ugly February, which could shave off 10+ percent, and maybe 20% by April/May?
I will add though that time is running out for the bulls and they really need to get through the all time high by the end of this week as if they don't get through it, and just make a double top into Friday, then that might be all we get as starting in February the bears will take over.
As for now (Tuesday) I think we go up as that's what I see in the short term technicals. If we reach gap window, or gap fill, bulls should try to go sideways into the FOMC to get a bull flag formed and keep bears trapped. Then use the FOMC to break through and blast off to new highs into the end of the week.
Have a blessed day.
