Lack Of Downside Follow-Through

We have seen lower prices today, but on lower volume. Advancers and decliners and up/down volume are roughly even so far today. To me this has the feeling of a b wave, although it could be wave 5, it just doesn't feel right to me. This is entirely subjective. I have continued to scale out of shorts as targets were hit and I am 75% cash at the present.

The one thing that has been nagging me all along is the time factor between Minor waves 4 and 2. While they don't have to be the same, wave 4 has seemed too short and far away from the upper channel line. I am beginning to suspect that the 10/24 lows completed Minor wave 3, and we are only now in the middle of Minor wave 4. If this is the case, we now have the possibility that we are still in a triangle or a flat that will work over toward the upper channel line. We could see a sharp thrust back up to 9800 to 10000 in the Dow in wave c of 4 before wave 5 gets under way.

While typing this post the markets have reversed and are moving higher. Volume is picking up. Perhaps wave c is underway. This is why I have urged caution in dealing with the current market pattern and timing as there are too many potential outcomes to be overly committed either way. If we get a substantial rally, it could be the last opportunity of the year for a good short trade.