I EXPECT A LARGER OVERSOLD BOUNCE
I don't have much new to say today so this is just a brief update.
I maintain the scenario of a corrective pullback in progress from the May 22 high.
So far we have a 3-wave down leg hence price should be unfolding a Zig Zag down.
As I mentioned yesterday the down leg from the June 19 peak is not impulsive, therefore the assumed wave (C) instead of unfolding an impulsive sequence of 5 waves it should form an Ending Diagonal.
If this is the case then price is now involved in the wave (II) rebound.
The minimum target requirement for the assumed wave (II) is located at the previous support now resistance at 1608.
The internal structure of the bounce from last Monday's lod, despite yesterday's overlapping move, should have concluded a Zig Zag of a potential larger Zig Zag or it could be unfolding a Double Zig Zag, if the pullback from yesterday's hod is corrective and does not close the opening gap at 1573.09.
If this is the case we have a potential extension target in the range of 1606-1614 for the next up leg (wave C or W).
What was a support now will act as resistance so we have to see how price will behave at 1598 and 1608.
If bulls reclaim the first resistance then this bounce should top in the range 1608 - 1617.34 (0.618 Retracement) or not higher than the 50 dma which stands at 1618.50.
Bonds remain a concern and could spoil my short-term bullish scenario. The thrust following a Triangle should establish some type of a bottom but so far there is no indication that TLT can set on an oversold bounce.