The current rally from the 11/2 low is not impulsive, no matter how exciting today's rally may appear. The retracement targets should be hit or exceeded tomorrow as wave (c) of [c] of (B) (or 2) up completes. I suspect that based on the wave count the market will respond positively to tomorrow's employment report. Once complete, the selling should return in equal measure.
Today's rally qualifies as a follow-through day by IBD's standards, so it will be interesting to see if they call it that way in tomorrow's edition. I would be very cautious in giving that call too much credence. This is one of those times that the principle of the second signal applies. The principle of the second signal is a concept that I developed several years ago which states that "after a countertrend correction has begun, the first buy signal is likely to be false, so wait for the second signal". Occasionally you will miss a rally, but this principle has saved me a great deal of pain.
Once the next wave down is underway, we will be able to gauge whether it is wave (C) or 3. At the moment, it looks like it will be wave (C).
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