Yesterday I expressed caution in the aggressive bearish view and today I'm expressing even more caution for the bears. Today's big bullish reversal came on high volume and in what appears to be an impulse pattern to the upside, suggesting that the larger trend has turned up. The previously projected wave 3 down is taking way too long to get started, and we have a series of declines lately that all look like 3 wave drops followed by a strong impulsive rally today. This means that if the market doesn't tank hard early in the morning, most likely we'll have new highs to come soon, and perhaps even a 5 completed wave rally from 1044. A break above 1111 would be devastating to the bears at this point and probably signal that this year's highs will be broken as well. One thing I did notice is the expanding nature of the decline from 1111. This is very similar to what happened at the early stages of the big wave 3 that started in August of 2008. As long as 1106.42 remains intact, the series of lower highs will remain in place, the expanding nature of the decline lately will give some hope for the bears.
Unfortunately the bearish evidence and wave count likelihood have diminished severely at this point, and the inability of the bears to take control in wave 3 over such a long period of time is concerning. In order to make things back on track for a wave 3 down, and to get aggressively bearish in the short term again, I want to see a break and close beneath today's lows at 1086, which would erase today's impressive bullish move.
PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.
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