I don't have much new to say today.
Yesterday I suggested that given the extreme oversold reading reached by the McClellan Oscillator on Tuesday, and by other short term breadth indicators the odds of a large rebound were increasing.
On Tuesday the McClellan Oscillator dropped to - 103.05
You don't see often-such low readings, in addition when it has occurred in the past, price has established an important bottom. This time, in my opinion this is not the case but the odds that price will attempt a multi-day rebound are very large.
For the short-term I don't expect that McClellan Oscillator will recover above the zero line.
If the price action, in the next few days, adjusts to my "plan" then we will see further price weakness and a potential positive divergence in the Oscillator. Then the odds of a larger "swing" tradable bottom will be large.
For the time being I maintain "The Plan" that calls for a move that will retrace a portion of the 3 -wave up leg off the October 4 low. Afterwards the intermediate up trend will resume.
I have on my mind 2 target zones: 1340 & 1292/1288.
My feeling is that we should see price closer to the latter then the former.
As you can see in the daily SPX chart above, we have an "Inside day = Harami" candlestick that is strengthening my preferred short-term scenario that calls for a multi-day bounce ("dead cat bounce").
If price manages to achieve an eod print above the 50d = 1373 then the target range for the assumed wave (B) "bounce" is located in the range 1386.87 - Tuesday's gap fill = 1398.08
Maybe this time dip buyers will not be so confident as in the recent past then the potential upside target will be not that impressive, maybe closer to the 1386 zone.
I have also mentioned that we cannot lose sight of EUR, since its EWP calls for higher prices ahead but at the same time more weakness for the short-term time frame.
Therefore I don't expect a major bottom for the equity market as long as I don't see a bottoming pattern of the EURUSD.
For the short term if the EUR bounce stalls at the 50d = 1.3200 it should complicate a move of SPX above 1386.
Today we have GOOG reporting but I think that Friday's release of JPM before the bell could encourage or depress the bulls hence Friday eod print may dictate next week's directional move.