Did everyone who went short yesterday change their minds today? You might have thought so given the sharp rally, but one thing to keep in mind before exiting any new short positions just yet is that second waves often are deep retracements. Today's rally may have been a deep smaller degree second wave. If so, there are key levels that should hold near term. For the Qs 43.68, for the SP500 1098.89 and for the Dow 10119.17. The Dow in particularly is notorious for deep retracements.
If this is the case, then we should see selling fairly soon tomorrow morning as a small degree third wave kicks in. If these levels are taken out, and in particular, if the October 19 highs are taken out, then we can expect a move to the higher targets to complete wave c of 5. If the SP500 takes out 1121.59 on volume, I will exit index short positions and wait for a new entry point.