So far today the tape is pretty disappointing for the bulls considering that JP Morgan "manufactured" really good earnings. When I look at the daily chart I think we are at a pivotal time right here at the $131 level … as you can see bulls really need to lift the price if the current wave count of a 5 wave bounce higher is going to pan out.
As you can see on this chart, the RSI(2) indicator is oversold and is indicating that a potential daily bottom could be near. That is also hinted at by my favorite bottom fishing indicator, the McClellan Oscillator.
The Oscillator is not fully into the oversold zone as indicated by the yellow highlighted area but is right at the top of that range. My favorite level is that -75 zone and it is currently at -52ish.
Other indicators are far from bullish so I am looking for any bounce to be short lived and will look to get short at that time. Drawing a wave 5 target based on 5 = 1 draws a potential top at $135.72.
If you look at fibonacci time targets, the most logical spot for a top would be in 10 trading days which would put the date at April 28th as I believe there is 1 trading day holiday between now and the target date.
I would find it difficult to be short the market here …. any break lower should be marginal. I'm starting to sound like Bernanke back in 2007/08 when he was talking about sub-prime …. I think that is my cue to finish the blog post.
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