We broke over 1200 today. However, the waves still look corrective for now. If we break over 1205 and 1210 tomorrow, it could mean that this up move is not corrective.
On the bearish side of things, today basically had to be the top for subminuette wave ii.
If the bearish count is to play out, we have no room to the upside. We need to sell off tomorrow.
If the Nasdaq breaks over 2515 and the SPX breaks over 1210, we could get a run back towards the highs.
Those are the key pivots for the upside.
On the SPX hourly charts, there is a clear topping pattern. Most tops are usually rounded or very choppy, as opposed to bottoms which are more sharper and more of a "V" shape.
NOW
This pattern is a classic distribution pattern. Strong money handing over to weak money. Smart money giving to dumb money. If this is a topping patten, we could chop around a little more to shake out all the weak money, then we could possibly fall hard, similar to January of this year.
JAN 2010
As you can see, we had a very similar pattern in January of this year. Chopping around in a topping process, then falling nearly 10%
There was also a very similar pattern in October of 2009.
OCT 2009
We chopped around in a topping process, then fell nearly 6%
So these topping process always like to fake people out. Watch for our current low at 1181 to be taken out. If it gets taken out, we could fall hard after that.
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