On Friday, SPX came within spitting distance of Target 2, then bounced like a Fed-sanctioned superball. This creates a pretty clear line in the sand for bulls to hold if they want to continue on to form Wave 5 up:
INDU is interesting, and there are multiple possibilities in its pattern -- including the possibility that a larger correction in INDU has already begun. In that option, INDU could bounce in wave 2/B while SPX rallies to a modest new high in Wave 5, before they both decline again together. Not 100% clear that's the play, but it's certainly on the table.
In conclusion, keep in mind that even if SPX does go on to new highs (never guaranteed, of course), we're getting into the general ballpark where a larger correction could show up anytime, so new highs would not necessarily be a good thing for bulls in the longer run. That said, given the general irrationality of the market this year, if new highs do manifest, it still may be wise to await an impulsive turn lower before getting too crazy on the bear side. Trade safe.
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