Bullish Above 1100 Unless the Bears Can Close Below 1100 Tuesday

So the bulls did surge the market well above 1100 turning me short term bullish. Right now there are only 3 waves up from the July 1st low, but you do need to start with 3 waves to get to 5 waves. But I'm not sure the market will get there. NYSE total volume has not exceeded the 13 moving average since June 25th. So that's a whole month with subpar volume. And the selloffs over the past few months have been done on big volume spikes. This is concerning for the bulls since they can only rally the market when barely anyone is participating. Rallying on weak volume is typical of bear market rallies, not of new bull runs. The bulls need to show they can rally on big volume, and going over a month without doing so does not instill confidence in the bigger picture bullish case.

The fact that the S&P closed on its highs suggests there might be further upside tomorrow. The S&P needs only 16 points to break the series of lower highs after making a new low that started way back April 26th. Doing so on strong volume would be more evidence for the bullish case. Failing to increase volume would continue to call into question the foundation of the rally altogether.

I'm not posting any charts or counts today because at this point the possibilities are numerous and I have low confidence in all of them right now. It's possible that a large B wave triangle is in the working that started May 25th. This count would be negated on a new high above 1131. It's also possible we're in a large flat correction which would lead to a short burst above 1131 before a massive reversal. It's also possible that a combination correction from the April high is complete, and we're in a 3rd wave to new highs on the year. And on and on and on. There are just too many possibilities will little definitive breaking points or certainty right now. So I'm riding the momentum for now. I'm short term bullish and will stop out at about breakeven just below 1100. If the market can close below 1100 tomorrow, I would not only exit my long position, but I'd enter short as well.

The bottom line is that I'm unsure of what wave count is probable right now but I do see the momentum to the upside as long as we stay above 1100 tomorrow. A close below 1100 tomorrow would get me short term bearish 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.