"Monday's update suggested that the market had reached an inflection zone, which meant a larger bounce was possible. We did get some upside follow through, but then Tuesday retraced much of it. We can see SPX's low came at a very old trend line, so that's going to be the next zone bears need:"
"We discussed COMPQ's trend line on Monday, and while it's not as old, the implications are similar:"
"Finally, SPX's "keep it simple" chart below. SPX made it back into the red channel, but it's entirely possible that completed a three-wave rally, so bulls will need to clear Monday's high:"
"In conclusion, there are enough waves up from Friday's low to mark a complete corrective rally if the market wants, which means the upside level is fairly clear. On the downside, there are multiple trend lines crossing Friday's low, so that level is even more significant (though, if it fails, always watch out for whipsaws and sudden snap-backs on the first breakdown, before the "real" move begins). Trade safe."
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