Looks like labeling yesterday's low as wave iv was right. We rallied all the way back to the upper trendline of this channel we are in. I was expecting a retest of the highs, but we got it quicker than I expected. In fact, we squeezed out new highs by about 5 points on the SPX.
On the shorter time frame, this looks like a perfect place to top. We have tagged the upper trendline of the channel for the 3rd time in what seems to be a classic short squeeze.
On a day like today, you would expect market breadth to be amazingly bullish, but in fact it was just a lousy 13:1 at the close, nothing too special. Just about 230 million shares traded on SPY, 216 on the Dow... again nothing too special.
It seems like we want to get back to the Crash candle, I don't expect it to break by too much. Some indices already have, but the SPX has not. Perhaps some divergence could be playing out. Remember, this is a Wave 2. It is supposed to feel bullish. Remember Primary Wave 2?
The line in the sand is 1173, if we break this we will probably get a run towards 1200 pretty quickly. But I think the top is closer than most expect. Unemployment numbers are this Friday.
A few weeks ago I posted a chart on the Euro... it is in the range I was expecting.
Just a little more and I think the Euro should turn lower again, sending the USD back higher. Yes... I am expecting the USD to go higher despite it being hammered lately. Check out the USD chart on the chart of the day panel.
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