The move back up, while impressive, was simply the final leg of a complex corrective pattern on the Ultra Short Term time frame. While there is still a chance for further rally tomorrow, odds favor that the end of this complex correction pattern occurred today and that means that lower prices are right around the corner.
The market at one point today was down better than 188 points and still there was NO PUT BUYING. The longer this continues, then the longer the equity markets will be held hostage from starting a new intermediate term leg higher.
As I was watching the action today, I really thought that we could break down to the 1478-1480 area on the S&P 500 cash index, but the late short covering rally stopped and reversed the decline. This in turn gave the probability model something else to ponder as it had called for the market to finish at the lows, not the highs. However, being the versatile model it is, the model adapted and now calls for a sharp drop to 1472-1474 perhaps lower than that, with next support at 1469 and 1460.
Continue to sell strength and remain defensive.
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