I want to suggest something a little different, that we are drawing a larger-scale leading-diagonal on the chart, that we are in a wave 4, to correct the crazy crash wave we may have finished today, headed to 2520. The move up was so strong that it left us only 10 pts away from overrunning the .382 retrace within the wave 3 structure.
We may sell some of this off, but I don't think we will give it all up just yet. January sets up to let this wave 4 play out, with most of the gains already in the bag from today. We are still within the narrow channel of the wave 3 dive, but it will only take a few days and a bit of rally to break us out of it.
January then becomes frustrating wave 4 chop, eating put and call buyers alike, since the VIX is still high, until the FOMC at the end of the month. The Fed is all that matters now in our credit-bubble asset "markets", so why not make all of the significant turns Fed meetings?
The channel puts us right at 2152 into March FOMC.
|SPX daily, leading diagonal proposed|
edit: adding the classic extended W3 scenario, so we can watch this bounce carefully.
|SPX hourly classic extended W3|