The indexes saw a very strong morning reversal, with the sp' flipping from 1385 to 1410. It would appear that the move from 1409 to 1385 was a likely B' wave, and that this is now complete. The final C' wave will probably get stuck around 1420/25 tomorrow, or into Friday.
It was quite a day wasn't it! I had certainly expected a bounce from the opening declines, although the size of the bounce surprised even me.
I'm sure many traders are bemused at today's action, but from a cycle perspective, it made a lot of sense. However, had we broken the 200 day MA @1383, and broken into the 1370s, I can't imagine the market would have managed to recover - regardless of anything some random politician said.
This remains a shaky and twitchy market, one of these days it'll snap/gap massively lower - for whatever reason, and scare the hell out of a lot of people, not least those cheer leading maniacs on clown network TV.
Well, I'm sticking with the original outlook which was the 1410/25 zone. We've been brushing against the base of that zone since last Friday. As seen on daily'4, a backtest of the Oct'2011 (now broken) rising support would be a very natural ceiling for this wave'2 bounce.
sp'daily4 - original outlook
Assuming today was indeed the completion of a B' wave (also see hourly charts), then a C' wave is underway.
I remain on the sidelines, and waiting for a major re-short, somewhere around 1420/25, which may indeed occur as early as tomorrow.
A little more later.