I believe that today's high marked the top of wave (B) up. While some may take comfort in the fact that the Qs closed at a new rally high, the volume today was less 5% greater than it was at the high in January and was below average at that. Usually, valid breakouts will show a volume expansion greater than 10% above the previous high. I was expecting more of a shakeout for wave [b] of Y, but that did not happen. Instead wave [c] of Y wedged higher to complete wave (B).
Now, the only question is whether we will see a 5 wave impulse move down to retest the February low, or whether we will see a 3 wave move down to set up a triangle, or some other combination to extend the correction. There is no way to know at this point. However, if we are to see a 5 wave impulse down, most of it should happen next week with the Qs moving below 44 by the end of next week. If the Qs remain above 45 for most of next week, then the triangle alternate is the likely interpretation.
The new highs in the Russell 2000 and the Nasdaq 100 negates the imminent return of primary wave 3 down, in my opinion, which means that open short positions should be closed sometime between now and the end of March in preparation for wave [C] of x up. I have a couple of remaining short positions which I will looking to take profits on during this time frame. I have been stopped out of my other short positions.
Longs have been somewhat rewarded in the past two weeks, but it is probably time to take profits on short-term longs. I exited WYNN today as it approached its upper trend line. I will give a couple of other short-term longs a few more days to see if they will reach targets.
If markets advance strongly from these levels, then we will have to reconsider the interpretation.