Last Monday and Tuesday the broad stock market plunged sharply with a low in the DOW at 27,325 and in the S&P 500 at 3,070. These lows did not reach our corrective targets (27,100 and 3,020, respectively) and the market soared back up Wednesday through Friday. Though they didn't reach our targets, Tuesday's lows could have been significant sub-cycle bottoms, but we like to see significant bottoms in reversal zones (which wasn't the case on Tuesday). If this rally continues into next week's reversal zone (Dec. 6 - 17), and all three major market indices (DOW, S&P 500, NASDAQ) make new highs, then we will have to assume Tuesday's lows were sub-cycle bottoms and a bullish rally is in progress. But if only one or two (not all three) indices make new highs (bearish divergence) in this new reversal zone, there's a good chance we could see a sharp downturn following those highs. This call is unclear at the moment, but technical factors favor the first (bullish) scenario. We may make a trade (short or long) this week depending on how the market moves so stay tuned.
Note that all markets are difficult to call right now which is why I didn't post any blogs last week. I will update things this week.