To me, today was a classic blow off top. I really feel that the market is close to a top. We have had a few weeks of continuous up side, with very little pull backs. Bullishness is once again reaching very extreme levels, the news is bullish... everyone is buying like crazy. On top of all of this, a lot of select stocks are having short squeezes on low volume. Too add to that, there are some key divergences in the indices.
The up move today was on decent volume, but it was backed by "news." With the diagonal wave count, today was a slight break over... a blow off top.
We have also broken the 61.8% retracement on the SPX. 1150 is the next real big support. We could make it there, but I feel that market doesn't have much left. Breaking 1150 will be tough, but if we do... well, then everything is wrong.
Here is a quick snap shot off all the indices. Take a look at the divergence and how much they have retraced.
SPX:
Dow:
Nasdaq:
Dow Transports:
Russell:
The VIX has also been hammered the past few weeks. I think the VIX will have a huge spike in the next few days.
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