Very dull day today. Tight range in the SPX. We were basically hanging around 1110 for most of the day. Like I said in my video over the weekend, watch for this level to be a place where the market should stall, if not reverse. It seemed to back off a little bit into the close, but I wouldn't read much into this, yet.
So since we did not have a big sell off day, and I am going to revise my counts to my alternate I talked about. Nothing much has changed, just the degrees get bumped up by one.
In this count, I am looking for a high for Minor Wave 2 around 1115-1117. Just as long as we don't close above 1110, we should be fine. But if this count plays out, watch for 1115 intra-day.
The alternate count is ovbiously that Minor Wave 2 has ended, and the down move today into the close was the start of wave 3. We need confirmation of this tomorrow.
Other than that, the RSI and MACD are both diverging, just like they should be.
Most RSI and MACD highs occur in a wave 3 of a move, since wave 3 is the strongest. With wave 5 being weaker, you may see prices making new highs, but the RSI and MACD don't always confirm, since internally wave 5 is weaker. Seems to be the case here.
On the longer time frame, I wanted to show you this interesting chart on SPY.
This channel is coming from the highs back in October of 2007. We broke above it, and this recent down move could have been a backtest.
Only thing that doesn't seem right is the volume.
If the volume picks up to the upside, it will be very key to watch the highs around 115.
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