The markets are likely headed higher from here. Today would have been a great day to reverse and head lower, but that didn't happen. Instead we had a pause day. The 25dema is close to crossing up the 50dema, but we will likely see a pullback when that happens since the 50dema is currently resistance. It looks like the Qs are headed to 31.50 to 32. The Dow looks to be headed to 9275. Any breakout above those levels would indicate a much larger than expected rally is underway.
AAPL spells trouble ahead. AAPL is forming a bearish descending running triangle, which has just completed wave d down. Wave e up should not move above 103.60. Look to short a break below 88.02 after wave e completes with a downside target of 65. However, since this is a 5th wave and the market will be headed down in a 5th wave, early profit taking would be prudent. RIMM is set to move down with AAPL. A move above 45.36 would change the outlook on RIMM.
I expect the financials and the transports to lead to the downside as they are lagging in this rally. Watch for moves below the 12/12 lows for a heads up on market direction.
Another market to watch for a heads up is the US Dollar Index. The stock markets have been rallying as the dollar has fallen. A reversal in dollar, which may be imminent would also be a sign that the rally has topped.
There may be very little action until the end of the year, so don't get chopped up. Wider stops than usual will be required until the trend reasserts itself. I heard today that there may be another wave of hedge fund redemptions due to the Madoff scandal, but that they won't hit until after 12/31/08 for tax reasons.