Today's rally on better than expected GDP from government spending.........uh......I mean "consumer" spending, has the markets very giddy. The rally is strong internally and across all sectors and indices. The wave count so far is unfolding nicely and places this rally as a wave 4 (see 15min S&P cash chart). If so, the rally cannot exceed the wave 1 low of 1074. A break of that level will cause me to rework the short term wave count. The key level remains the 1101 high though; that should remain intact for a very long time.
Today's action appears to be a relief rally removing the short term oversold condition left in the markets. Afterall, with such strong selling conviction across the board yesterday it was evident that everyone was selling who wanted to sell which really leaves a few bottom feeders to come in and fluff the market up on mediocre volume.
As long as the rally unfolds in a corrective manner, on light volume, and key levels remain intact, it will be overall bearish because it will alleviate the short term oversold conditions as well as the calm the VIX down to prevent the panic capitulation the bulls want to form a bottom.
3 comments:
Fine analysis
Thank you
comforting!! Nice Todd :)
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