The main indexes opened lower by around 1%, but most closed broadly flat. The Trans and R2K both closed +0.2%, whilst the sp' closed @ 1650, a fall of 0.3%. It is highly arguable that today was merely a wave'2 bounce, and that a very strong wave'3 down is due to end the week.
Well, that was certainly an interesting day. The bears opened everything lower, but as expected, the market rallied across the day. No doubt this was partly due to a QE of 3-4bn, but it was also a natural bounce.
The smaller 15/60min cycles are probably now reset, and there is great potential downside across ALL of Friday.
It is important to keep in mind that if wave'1 was 50pts, if you take 50pts off today's high of sp'1655, that gives us 1605. That would make for a superb way to end the week, but yes, that is probably being too optimistic..or should that be pessimistic ;) ?
Despite the bounce, underlying MACD (blue bar histogram) momentum is increasingly swinging to the bears, and we are due to go negative cycle at the Friday open, and get some bearish crosses on many of the indicators.
Everything is primed for those on the bearish side. With no QE tomorrow, it is going to be fascinating to see how we close the week.
a little more later..