EDIT 8:30 Changed the chart to more realistic trendlines and timelines. Notice that the big selloff comes in the new quarter after window dressing. QQQQ's sell hard. Deep retrace for wave 2 but by then a backtest of the main down trendline holds.
Can the wave structure support that move? You bet. In fact today was quite a high volume breakout of not only 780 resistance but a main down trendline that has defined this bear market since September 2008. I charted a chart with the "assumption" that perhaps this up move will close the 826 gap. Its another "gee whiz" wave structure that is more practice than anything.
Green [iii] would stop at the bottom lip of the 819 gap and would be a 1.618 Fib extension of green [i]. Then follow-on green [v] would ultimately close the gap and finish the move above 830. And of course the hyper-bull move spike today was the "third of a third" in the wave structure on high volume which could indicate the most bullish part of a wave 3 structure.
In addition, you can see from my wave structure that the last run to 830+ is no smooth walk. There are some mandatory down move corrections smattered in between. Perfect for OPEX Friday.
What would this structure accomplish? A couple of obvious things: 1) achieve closing that HUGE gap at 819-826 which just begs to be closed as the market is gaining ground of it. 2) Achieve separation of the main downtrendline and break above the down RSI bear market Primary wave 1 trendline (weekly shows a break, daily does not yet quite).
Any retrace from the 830's could then be achieved and "settle" back and backtest the main downtrendline rather than getting stuffed back under it this week and next. There are simple things that define this is as a Primary Wave 2 and breaking the main down trendlines, backtesting and holding is the most defining thing.
But this is highly speculative and only based on a few things and assumptions. The market is certainly overbought, but....and that gap beckons the bulls....