Thursday Market Action

Today, The SP500 rose all day, opening at the low and closing at the high.  It also broke the 1205 resistance line, and the down-sloping channel border.

OK.  Nobody said this would be easy.  We now have trend boundaries broken low and high in rather rapid succession, as indicated by the red circles.  The latter, along with the break of 1205, challenges the idea that wave V down has started.  There is always an alternative wave count lurking in the wings, and one now needs to be considered.  If wave V is in force, there should be a rapid drop tomorrow to bring the index back into the channel.  If not, then there is more complexity to wave IV, and this could play out over the next couple of weeks with a narrowing band of sideways trading.  

Here is a reading on the current state of the SP500 by Kevin Cook, with commentary on the trend channel.

Bearish Signposts: Of Flags and Sentiment
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