Today's rally makes a nice 3 wave rise following a clear 5 wave decline. As long as the 800 level, and especially the 815 level in the S&P cash stay intact, I'm shorting this rally.
This morning, the market did not sell off hard creating a "wash out" like I would expect if a major bottom was in. Instead, it trickled down slightly and then rallied all day on strong internals. We may see some follow through tomorrow, or even the rest of the weak. But gains from here should be hard faught and eventually reversed.
I am now half short again and am stopping out if the S&P rises above 792. The fact that the market didn't "wash out" today and rallied instead is the worst the bulls could hope for. In means that most likely this market will absolutely tank in the near future bringing the S&P into the low 600s.
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