The positive earnings report from Intel will no doubt push markets higher tomorrow morning, but trendline resistance is still just ahead. I think it is unlikely that a break of the trendline will occur on the first try, and the action today still failed to best the point and percentage gains on July 7, which suggests that a small degree 5th wave is extending.
Looking back at past strong rallies over the last few years, the most likely course is still a short 3 to 4 day pullback with a sharp intraday shakeout before the markets can move higher. There's nothing to say that a pullback must happen, but I will hold out for one before adding to existing index longs on the MACD buy signal. I am partially long based on the IBD signal and previous MACD buy signal and looking to add as the opportunity presents itself.
The point gain of the current rally is about the same as the June rally. It needs to exceed the June rally in both time and points to confirm the strength of the rally. Sentiment continues to support a greater rally than we have seen since the May panic. If we see a bona fide breakout above the downsloping trendline, a retest of the April highs is not out of the question before another swoon this fall to complete the correction. In the unexpected event that we see a 5 wave advance, we may conclude that a shallower correction this fall would be an alternate buying opportunity rather than a retest of the July low.
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