Looks like were off to the races, but we've reached to top of the new range, and time for some consolidation, in what I believe is wave 2.
Yesterday we traded into what looked like a bullish leading diagonal triangle - in wave 1 - and from there we should've seen some consolidation in wave 2. The market sold off in a straight line (to the 2495 level), and that's an impulse wave, so I've updated that sell-off to a powerful wave c/iv, which was followed by a new market high in wave 5 (of 1).
$SPX - yesterdays chart - I put the arrows on yesterday's chart to show how I though this might play out in a simple A-B-C correction. Instead the market broke out - not surprising at all.
$SPX updated chart. Now that most bearish traders have capitulated it's time to pull back in what will most likely be a simple A-B-C correction. I'm anticipating an 3-3-5 correction, meaning wave A subdivides into 3, as does the snap-back rally in wave B, which is followed by a powerful wave C (a 5 wave impulse). I'm 2503 is key support, and I expect it to hold above that level. With any luck we can complete the entire correction in 1 day, but could take 2 days and that would set another bear trap for the first trading day of the month - Monday.
Take Care, and good luck.
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AA
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