The Qs broke above the Jan 28 high yesterday and today failing to close above that level. Previously I said that this did not invalidate the bearish case meaning the potential for a near term resumption of the decline in wave 5 down of primary wave 1. This is true because the rally high of 31.63 on January 6 has not been exceeded and the current advance is likely wave ii up of 5 down. As long as the January 6 high is not surpassed the weight of evidence leans towards a resumption of the decline near term (within days). If the January 6 high is exceeded, then either the November 21 low was the end of primary wave 1 down, which I doubt, or wave 5 down will be delayed for another week or two.
An interesting observation looking back over the last year is that the QQQQ relative strength has peaked with each rally. What seems to be happening, as pointed out by Robert Prechter, is that the small speculators are becoming bullish relatively quickly after each bottom as demonstrated by buying the riskier high beta Nasdaq 100 stocks before there has been a true climax bottom. So, rather than viewing the QQQQ relative strenght as a bullish omen, it is probably a sign that a top in the Qs is near.
It is clear today that people want to be long before the employment report. Either they know something that I don't or this could be a good setup for a sell on the news event. Tomorrow is a Gann turn date as stated previously so the rally into the turn date also suggests tomorrow may be a down day.
The intraday pattern suggests that we will see another attempt to push the indexes higher before they roll over later in the day regardless of the report.
On a side note, today's action confirmed IBDs market rally call as the macd on the SP500 and Wilshire 5000 turned positive and the markets closed up on higher volume. Obviously, tremendous tension has built up that will be released one way or the other very soon. Currently I am not fully positioned for either direction, but weighted toward the downside.