When I woke up this morning I had thought the market was in the middle of a w3 on a 5 wave structure of an A or a W1. But as the market bounced from the lower trendline of the Megaphone Top possibility I posted yesterday and then breached 1121, I went hedged as it seems the market is following the Megaphone pattern that points to one more high. Going by the trendline, we might see the market barely breach 1131. I have the low today at 1114 as an "a" and for the Megaphone scenario to play out then "b" would be part of an expanded flat.
The rally is interesting as I can't really pin point the specific catalyst for it. Some say that it is the prospect of a "Double Dip" in the economy decreasing but I don't think couple of sets of data in couple of weeks reverses a trend. So I just think it's euphoria after being depressed for months. And since euphoria is technically a temporary bout on insanity, there is not point in fighting it. So I am guessing we will see a pullback to the 1080-1090's area and then we will resume another big rally possibly to the H$S target of 1250. If 1080 doesn't hold, then the bearish case still has a possibility.
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