The S&P climbed mildly today but then reversed into the close. Today was another light volume day, and since the big reversal volume spike last week, volume has failed to even come close to getting above the 13 day moving average. So there is little interest in the masses buying up this rally. We have jobs data coming out later this week so I expect some volatility. Lately, no matter what the jobs numbers have been, the market has rallied by the end of the day, or early the next week. But since we're now rallying into a jobs number, I'm not convinced that trend will continue.
As you can see from the above S&P 15min chart, the market may have completed its 5 wave advance and is ready for a corrective phase downward. Right now I'm counting the 5 wave move as bullish for the medium term, but want to analyze the upcoming decline to see if it is in fact a correction before charging to new highs, or if it's a resumption of the downtrend. Please refer to yesterday's post to get my primary bullish count and my alternate bearish count for the medium term outlook. Right now, the key level for the bullish case is 1045, which is so far away it doesn't really do us any good. But once the decline gets underway I should be able to get a better idea of the short-to-medium term outlook and then come up with better key levels to control risk.
My stance now is that the market is probably at the tail end of this current rally phase and we should see at least a short term decline coming soon. The structure and strength of the decline will help us determine if it's a correction, or if it's a resumption of the downtrend to where I want to get aggressively short again.
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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