Actually when I looked on a long term chart it had a distinct "ABC" look of a three wave correction and to me thats about all that matters at the moment. It still has that look.
The market internals today had the signature of a possible "kickoff" move of yet another leg up on the rally. You can see on my chart how each rally leg kicked off. The one standout feature is how the "kickoff" appears to be weaker and weaker which is consistent of a bear market rally. Yeah up volume ratio was zooming today but it didn't match the July kickoff and certainly nothing matched the March kickoff.
You can see how I have the market internals laid out and each rally leg has its own signature. and you can see how its getting weaker. So there is still confidence that this is merely a bear market sharp rally, albeit a historic one.
What would this possible kickoff represent? Well, a third zigzag of course considering that the P2 can easily be counted as a double zigzag (as EWI has it).
Another point of consideration is the time factor. P1 took 17 months. If the market achieved a perfect time ratio of .618/.382, then P2 should actually not complete itself until about January 15th 2010.
I actually theorized a triple zigzag to 1125 back in May based on time and Fib retrace of 50%.
The market is about sentiment. As Cobra showed over the weekend, it was way too bearish in such a short term. Even McClellans got extreme in a short amount of time. This bothered me and thats why I took a cautious approach for the past week. Obviously spirits got bumped up today but market internals like that will do it.
However, the internals of today caught me by surprise. I expected a nice up day, but the internals cannot be ignored unless for some reason the market does indeed display a spectacular reversal.
The question is, is this another rally leg kickoff of a final zigzag that will take 2 months to play out and add another 60-80-100 points on P2?
Well if it did, GS will surely have earned their Christmas bonuses huh?
Either way, even if its a final zigzag, it could be a slog for a good bit of it.
And 3 zigzags is the maximum....
And if it took until January, everyone will have abandoned the bear.
But we need the follow-thru evidence of tomorrow to see if this is indeed a third zigzag kickoff.