Recently, S. Hochberg, who writes the EWI short term updates, observed that in this bear market during counter-trend rallies often the leg 'C' was shorter than the leg 'A'.
If this tendency holds – and if this rally turns out to be, basically, only a bounce – it is possible that we may see a pullback, which may go no deeper than SPX 796.50 (50% retrace of today’s rally, as well as the low of wave 4 of a smaller degree). After that, we ought to have (at least) one more impulse up, but it may be smaller than the run this afternoon.
Since the rally today was a "five", it is likely to be either the first leg of larger impulse, or the first leg of a zigzag. Later, it might unfold into a more complicated structure – double or triple "three", or whatever.
It is hard to be certain just WHAT are we correcting? If it is the decline off March 3, then the likely targets might be SPX 813 and 820 – the 38 and 50%.
Just throwing around some maybes and ifs... |
