The market held its' gains yesterday from the strong bounce, but there's still technical damage done, so more time will be needed to decide on whether or not the market is going to drop hard or base and rally hard. I still lean toward a lot more upside because the cycles are still in a bullish period and just don't favor a crash.
I don't think it's straight up from here of course, as we should see a retest of the lows, maybe a couple of retests? I think we will see the first retest later this week, and if it breaks we'll probably flush on down to the 6400's, and ironically there's a FP on the SPY of 640.44, which could be the low? However, this coming first retest may hold as well, and just put in a higher low or double bottom.
If that happens (it's my lean) then we'll see another strong bounce like yesterdays rally into next week, and then another retest of the low that will likely get taken out on that hit and go for the 6400's (and the FP). After that though I think we start the real rally back up that will taken out the current all time highs. I'd call that move up the start of some wave 3 up inside the final larger wave 5. But for now I think we go into a "big swing mode" where we drop again 2 more times and rally 2 more times... then the last one starts the real move up. If I'm wrong I'll be looking for the bearish wave count I covered on Mondays update, but I'm just not feeling it.
Have an blessed day.
