SHORT TERM: market pulls back after gap up opening.
Stocks rallied for the first 15 minutes this morning as all the indices reached their highest levels in two weeks. Then the market pulled back throughout the day. At the close today the DOW ended flat, and the SPX/NDX/NAZ closed lower by 0.40% to 0.75%. On the surface it would appear to be just another short covering rally, four have already occurred during this correction. However, none of the previous four had the "positive derivative/RSI" divergences in place with the tech large cap Apple and Google in uptrends. So we should give this rally a further chance to develop. I’m posting the 15 minute chart of the NAZ in the photo section. It has the appearance of an impulse wave, 5 waves, up from the recent lows. Notice: wave i rallied then gathered support above the lows, wave iii gapped up to get started, wave iv was a positive irreglar flat with a gap down ‘c’ wave, and wave v made new highs topping on a negative RSI divergence. The correction, which lasted most of today, appears to be a zigzag with a positive divergence at the lows. In order for this potential impulse wave to continue NAZ 2044 needs to hold support on any additional selling tomorrow. The NDX closed at 2054. Short term momentum is oversold, as shown. Tomorrow appears to be another key day in this ongoing correction.
INTERMEDIATE TERM: downtrend, but trying to establish a sustainable rally
LONG TERM: neutral to bullish.