The S&P's sharp reversal is indicative of a 2nd wave rally. So I adjusted the wave count a bit to account for this action today. Wave (ii) does not appear complete, and today's move was probably just wave a, and most likely tomorrow we will see a choppy or flat downward move for wave b. To support the fact that more rallying is in the cards, my custom indicators signaled a VIX sell signal starting yesterday on the 130min chart (1/3 of the US cash session). That bearish signal was confirmed at the end of trading today with a price close beneath my signal line. This signals a bullish move for stocks overall for the next few days. I'm projecting the wave (ii) rally to end around the 2080-2090 area.
The only issue I see here is that VIX buy signals, and sharp rallies like we saw today, often also accompany strong 3rd wave moves. Since the market is lining up for wave ((c)) down, which is also considered a 3rd wave, then it is possible the market action I noted previously is extraordinarily bearish. This is less likely to occur though, so it is not my primary analysis and projection. I am sticking with the hard facts, and those are that the structure of price action supports my wave count, and that a VIX S&P buy signal has been confirmed.
PLEASE NOTE: THIS IS AN ELLIOTT WAVE BLOG EXPRESSING AN OPINION AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. TRADE AT YOUR OWN RISK.
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