The market just doesn’t know that it is supposed to go down. The probability of going down is losing out to the momentum of going up. Although the proposed wave pattern above has reached the minimum wave target in rapid fashion, there is a lot of space it can explore if S&P 500 (SPX) holds at 1500. There is more and more evidence that this wave is a three. The ability to fight off very overbought conditions is just another characteristic.
Yet another TD Sequential will finish this week. The SPX is the first of the major indices to claim a 13 for the week. This has had a pretty good track record in the past which some reversion to the mean is almost a given. But since 2012, the Sequential counts have been getting spotty. With markets and indicators stretched, this should get back on the track.
Yesterday had a potential reversal day but never materialized. Portfolio is 75% short. I’m looking at SPX 1500 as the dividing line between pressing shorts and managing additional upside. (update mid trading day)