With the VIX/Bollinger Band buy setup still in play, and with wave 2 looking quite pathetic in time and price yesterday, wave (2) decided to fulfill its normal structure and rally higher today. NYSE internals are very strong on this rally with 4.7 stocks trading up for every 1 trading down, and 83% of total volume to the upside. Also the S&P has 461 advancers and only 34 decliners. So this is strength across the board in every sector today. This is often how bottoms and rallies to highs have started so we have to be very watchful of the action in the coming days. Tomorrow is the jobs report and the past several months have brought rallies all day no matter what the data showed. So I'm prepared for further solid strength tomorrow as well. We also must be aware that the last 3 times the VIX gave this buy setup, the market has bottomed and rallied to a new high. I don't feel that will happen this time, but we should be aware of that fact, and understand that we probably will have some nail-biting days ahead of us as we watch the 1101 level in the S&P.
That's all just speculation from all the data I have surrounding me. The key is the EWP picture and it shows that we are in a wave C within wave (2), which was expected, and targets for resistance may be at 1067 and 1072. Wave Cs within wave 2s are very powerful affairs that often look like a new trend is starting when in fact it's a countertrend that's ending.
I remain fully short as I have been, watching 1101 in the S&P and psychological prepared for some solid strength at least today and tomorrow.
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