The market plunged yesterday after the close, coming very close to the cash close equivalent of the most recent low of 2045. But selling abated overnight and the initial bearish opening in the cash market was reversed somewhat. So, this is one of those instances where the after hours market follows a count in the cash market but by the time the next session opens, we have a different count. Technically speaking, the cash market chart looks like is following a bearish 5 count but we just can't ignore what happened overnight. So I decided to take off the labels to avoid confusion as the bounce today could be the start of a new rally. The bias remains bearish because the TA is negative but again, these fails attempts by bears to break support will lead to a new rally to all time highs. So in my opinion, bears are running out of time.
I ended up selling half my VXX and got stopped out of my other half at break even. It was a profitable trade but nowhere near as profitable had I woke up early morning. I guess next time I'll set the alarm! For now, I am preparing to go long depending on how the waves evolve in pre-market/early morning. Last but not least, oil looks like it is putting in an IHS so a clean break of its neckline at $52.50 opens the way to a rally to $60+ and a test of its 200 DMA (and most likely confirming a significant bottom at $42). Given the previous pessimism on oil, a rally in crude will most likely be helping equities.
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Short Term Trend = Bearish
Medium Term Trend = Bullish
Long Term Trend = Bullish
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