Everyone suspected the market would bounce today because it was deeply oversold on the McClellan's Oscillator to the upper channel. I had an arrow painted on 1063 and it complied nicely! But geez, almost a 9-1 up day would require yet another immediate reversal tomorrow for the bears to get a grip back on this market.
The market finished at the channel. But of course it did. And of course GDP exactly matched the 3.5% "expectations" (they'll revise lower down the road) And of course the DOW printed exactly 200 points (I knew it would). And of course it was nearly a 9-1 up volume ratio day. And of course the banks bounced well over 3% on POMO day...
(I actually played the oversold bounce when I saw opening up volume ratio so I ain't complainin!..)
Now that I got that out of the way, I'd say unless the market reverses shortly tomorrow, then we may be looking at a Head and Shoulders Minute wave [ii] forming. That would mean a deep, at least a 62%, retrace back toward 1101. Somewhere it will run into resistance (1080?) and get stopped. Perhaps a big backtest on trying to get into the rising trendline again (which can be argued was a backtest today and parked right at it).
So the wave options are:
1) Minuette (iv) is peaking and market will reverse tomorrow and head back down. Monday will likely make new lows?
2) Up day tomorrow (or some consolidation) after some higher highs as part of a Minute wave [ii] bounce to form a H&S peak sometime next week.
3) This was a reversal that will bring about new highs in some of the indexes, but not all. That would leave many intra-market negative divergences.
4) They drive the market up to 1121 or 1158 on some desperation move to constantly stay above the rising trendline and then the mother of all black swans explodes the market under its own dead weight.
(hehe I just playing with that last one)
I am leaning heavily toward option 2 if option 1 proves a failure. Then Option 3 makes sense.
Which means its probably option 4.