Another bearish set up has failed, the potential reversal pattern that I have highlighted last Sunday has turned out to be a small correction which will allow further extension within the up leg that began at the December 19 low.
Below, in the 30 min chart of ES Globex, we can see a likely Flat Wave (IV) correction completed at yesterday's lod.
I don't give up in my short-term outlook which calls for a potential 5% corrective move.
I am on the "look out" for the "true" reversal pattern that can occur at any moment, probably on OPEX day (next Friday).
My short-term bearish stance is not a "subjective" attitude, It is based upon what momentum and breadth indicators & sentiment are strongly suggesting.
As I mentioned yesterday: "Even if a top is not in place I am confident that we will "see" a correction of the December 19th. up leg very soon.
Given that yesterday price was once again unwilling to confirm the "awaited" reversal we cannot rule out another attempt to achieve a higher high.
Judging from the Dow Piercing Line candlestick, odds favour another push higher but if the Ending Diagonal is the correct pattern just a marginal higher high / Double Top should be the candidate for the long overdue reversal, therefore today we have to pay close attention on how price reacts once/if a higher high is achieved."
So in the Dow we have a "clear" Ending Diagonal in progress, here a Double Top or a Marginal higher high can "kill" the last bag holder:
Regarding SPX there is an "obvious" bearish rising wedge, which until the upper trend line resistance is not broken, it should cap the upside potential of this persistent and seemingly endless up leg.
And we cannot forget that the odds that VIX has already established some type of a bottom are very large. We now have a potential higher low and a rising trend line support which suggest that here there is a trend reversal
Another warning for the bulls is coming from the DAX which is having difficulties in following SPX/DOW/NDX higher and may have already the wave (3) of (C) in place
Keep in mind that the DAX has been one of "the leaders" during this rally; hence a failure here may presage a correction of the US equity market.
And to conclude today's daily update in my opinion the EUR will also exercise bearish vibrations since, if my short-term scenario is correct, a correction is already in progress with a pending wave (C) down.
