While we did test Friday's high and fail, we ended up testing Friday's higher low pivot, which the bulls were able to hold. We then rallied into the close. Stepping back and looking at the big picture tells us one very important thing: we have been consolidating below key support for the last two days after a swing high failure on the daily chart. Time is ticking for the bulls.
As for the near term picture, things don't change much from yesterday's post except that we now have a very definitive expectation for tomorrow.
Bullish picture:
We gap close to or above 1100 at the open and rally the rest of the day to close near the highs. As you can see in the last wave 3s, this same pattern has worked over and over with a break away gap above resistance.
Bearish picture:
We have one more failure somewhere between where we closed and 1105. Any gap up that closes tomorrow would be a bad sign for the bulls and should immediately push the indices down the rest of the day.
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