In light of the possibility that, a dive back toward levels last seen in March '09 might be imminent ... price action both last week and this week probably should be seen forming but the second wave of five waves down, rather than the third and fourth waves of a [shorter] five-wave decline whose objective previously was thought likely to take major indexes decisively below respective 200-day moving averages (which, of course, is well above March '09 lows)...
Last week's decline, then, might have formed wave b of 2, while this week's advance is giving form to wave c of 2. The open question now is whether wave c of 2 ended today and this afternoon's weakness marks the start of wave 3 down.
Your guess is as good as mine right now. Come tomorrow, though, we should have a definitive answer.
As things stand presently, that line of resistance identified earlier this week has proven a formidable ceiling capping subsequent follow-through to Monday's massive short squeeze. Whether this continues holding true remains to be seen.
If, in fact, the second wave of five waves down ended today, then its form is seen taking that of a 3-3-5 "running correction." This wave form portends significant near-term weakness ahead. Supporting this likelihood has been a compelling, negative, underlying technical configuration accompanying the formation of this so-called "running correction."
Of course, there also is reason to suspect the relatively sideways trading developing over the past four days (i.e. following this week's first ten minutes) might lead to one final move higher before wave c of 2 is completed. Given such effort we have seen to keep the market levitated for months on end, who would be surprised if such further effort might afford a few more days spent in suspended animation?
However, considering developments to this moment, there also is good cause for fearing the worst, and stat. So, for now I'll leave it at that...
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