Yesterday was a good day in the sense that Monday's downside target was captured, but also a tough day because, early-on in the session, it looked like the market could breakaway to the downside. That didn't happen, though, and instead the market snapped higher.
At such times, I liken the market to a rubber band that's stretched to the breaking point: Either it breaks and goes into free-fall, or it snaps back with a ton of force.
All of this was discussed many times over the past couple weeks, so we can't say the snap-back rally was too much of a surprise in the grand scheme of things:
Monday's target was captured and exceeded by a hair:
INDU also failed to sustain its breakdown, and is in a similar position to SPX:
In conclusion, the level for bears to beat is still unchanged. Whether this rally will develop into the red c wave for a more complex second wave is still unknown for certain at this point, but yesterday certainly left that option very much alive. Trade safe.
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