Certainly an unexpected surprise to the upside today. This basically cancles out that wave [iv] triangle I talked about over the weekend. However, on Thursday I posted a possibility that this was perhaps Minor wave 2. Because of the triangle, this count didn't seem right as of Friday, but with today's strong up move, a wave 2 bounce seems logical for now. Internally, today was also very strong. We also have come back almost 100 S&P points from our intra-day lows on Thursday. That's 100 S&P points in about 2 days. This is a huge move.
For now, I will label this bounce as a Minor Wave 2. Upward correcting Wave 2's are supposed to wipe out a lot of the bearishness from Wave 1, and try to make it seem as if the uptrend is back. Certainly that's what seems to be going on right now. It looks like we have 4 completed waves from Friday's low. Perhaps the 5th is to come tomorrow. Minuette wave (v) that is.
So I don't think this wave 2 is over yet. Yes, we almost perfectly retraced 61.8%, but there could still be one last move up coming. We may get to somewhere between 1167 and 1176 tomorrow. If we have a hard reversal from these levels, it could possibly mark the end for wave 2. We must not break 1186.
We also have a pretty big gap left open from Friday's close.
Although today was a giant up candle on the major indices, the ETF's have a different picture. You can see the massive gap up, but then take a look at the body of the candle. It is a spinning top. This means that there is indecision and on top of that, the actual trading range today was very small.
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