Two Roads

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Well, I've got to say, Thursday's mega-rally has really played with my head. I've stared and stared at the charts, and what is in front of us short-term is really murky to me.

On the one hand, I keep wondering if the WAG was right the entire time. There were plenty of folks chirping that the WAG was dead. I'm not so sure. We could be in for a long slog to about 1140 or so into late June.

0612-up

On the other hand, I've noticed a series of consolidations followed by sudden slumps. That kind of outcome would resemble this:

0612-down
 

On the individual chart level, there are many charts that are so battered that it seems that a relief rally has already begun (RIG being a fine example). There are also many charts that, given the year-long rise they enjoyed, seem as vulnerable as ever.

So my confidence in my view of the market's direction is quite low right now. If we cross above 1103 on the September (which is now the front month) e-mini, that definitely helps out the bull case. A break below 1032.25, on the other hand, would amplify the bearish case more than ever.

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