The market broke out of the Descending Triangle and reached its bullish target with the gap up. Today's gap was impulsive and clearly bullish and there might be more limited upside to come on this leg. The question everyone many are asking is how much longer can this go on. Every single correction since August 2010 have been minor ones and at some point there will be more sellers than buyers. Elliott Wave counts are about to be exhausted as well as there can only be so many waves. The market is very overbought on the daily RSI (over 70) as well as the weekly RSI (over 70). In addition, the market has pushed out of the bullish range on the monthly Bollinger Bands so conditions are ripe for a strong correction. But as long as prices continue above the trend, the target for Feb (1350) might just be around the corner.
I covered at break even today at 1332 and shorted again at 1335, I think the market might put in another Rising Wedge so we'll see what the next correction brings. The trend average is now at 1325 so we should see a test again tomorrow or Friday.
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