Once again, from a squiggle perspective, there are three waves from the recent 1158 low. So we have a minimum wave structure for ii of (iii) of [i] of 3 down in place.
Yet today's price action can be viewed as somewhat constructive from the bull's point of view.
Today's high of 1203 was shy of our optimum retrace range of at least 1212-1223 SPX and specifically at least 1215 SPX and a covering of the Sunday the 20th of November night gap down on the e-minis.
Gap down area between the red lines:
Additionally, approximately 1219-1220 is the dividing line of recent price action over the last many months. You can see this on the weekly.
Elliott wave theory is a theory of probability. If 1219 cannot be recaptured, the primary count calls for a severe sell-off Minute [i] of Minor wave 3 event eventually taking prices under 1074 SPX.
ALTERNATE COUNT RECAPTURES RESISTANCE
If 1219 SPX can be recaptured and held as support, then the alternate count is solidly in play where Minor 2 is not yet finished and perhaps a breach of 1300 SPX to the upside within 6 weeks or less.
That is how crucial I think this near term resistance marker is.
I wish there was a solid contrarian sentiment play that would point the way one way or another. But to be honest its a huge mixed bag. There are overly bullish things occurring and there are overly bearish things occurring on varying time scales. The sentiment indicators are behaving like the price action: schizophrenic.
In the long run, schizo is probably a bearish trait. Eventually prices will follow through whether its next week or even early 2012.
I would absolutely love to see prices to the northside of 1260 SPX once again. I never seem to get what I want though.