Today was the first day in quite a while that the market began to show a few cracks in its bullish armor. The financials in particular were quite weak. However, it is hard to know how GOOG's afterhours pop will affect tomorrow's trading. The Qs are already trading near 51. Patterns are completing now in a number of stocks, but today's 3 wave pullback in the indexes means at least another high for the rally. The IWM is still in the ending diagonal pattern, but as so often happens in these patterns, it is extending.
The VIX and the QQV turned up today, which is pointing the way toward a top after the VIX sell warning. An upward acceleration in the volatility indexes will likely coincide with a top. Tomorrow is expiration day and it will probably be volatile.
AAPL posts earnings after the bell on Monday. The results will set the tone for the rest of October. A disappointment, i.e. coming in under the whisper number, will be enough to end the rally. A beat will push the rally well into November.
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