Today's rally in the stock market really didn't get any legs from Friday, the big rallies in the European and Asian sessions, and the crashing dollar this morning. Internals are not strong at all, however all this can change rather quickly. As long as the highs of the year are not broken then the bearish call for wave 3 is still on the table. But the market needs to give way and fall hard soon for this to remain a possibility. The first step for the bearish case was to have little or no follow through with all the rallying from last week and overseas. That is happening SO FAR. The second step is for a major reversal to occur very soon.
Gold and silver appear to be doing "blow off tops" which commodities normally do, and the dollar is making new lows which appeared likely after the sideways movement it had done for weeks. My eye is on the EUR/USD though and I expect it to pop above it's previous 1.4730 high to complete a "flat correction" where it will have a formed a major top and reverse at least 2,000 pips from there. Gold and silver should follow and fall hard after this blowoff top is complete. The stock market should fall at the same time as well.
So now we wait to see what happens and see if this year's highs remain intact to keep the wave 3 crash possibility still on the table. Hopefully we'll get a better idea of where we're at in the market by the action at today's close which could get quite volatile.
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