Are The Markets Ready To Breakout Again?

While the indexes certainly put on a show today, my hunch is that this is just part of a b or x wave that will be fully retraced. The volume today was average to below average. The McClellan Oscillator did not close above zero. In particular, the rally from the 5/13 low to the 5/20 high was clearly 3 waves and today's low did not undercut the 5/13 low in the SP500 or the Qs.

For intraday traders the trend was profitable today, but for swing and intermediate term traders, there really was no good entry point except to buy the gap down open, which I did not. On the 60min chart there was no pullback until late in the day. One could look to buy a continuation tomorrow, but again I think if this does prove to be the beginning of wave C up, we can look to enter the first pullback. Since we have not yet seen a suitable pattern completion, I prefer to wait for a sustained move above last week's high or the completion of wave c of B down before taking a position. Tomorrow should help us in this regard.

While the timing fits with my previous projections, the pattern does not. I like to see pattern, breadth and timing supporting one another. Mixed conditions often lead to mixed results.