Today the market consolidated a little bit with low volume, generally this is healthy. For the long term trend, MA 50 on the daily chart has crossed above MA200 some days ago, now MA200 is flat; last weekly EMA 13 on the SPX weekly chart also crossed above EMA 34. Therefore the long term trend has reversed to the upside. Last week, SPX reached 1018 which is slightly above 38.2% retracement measured from all time high in 2007 to March low at 666. Technically the trends in most time frames are pointing to the upside. However from Elliott waves’ perspective, the big rally may have approached to the last stage and a massive primary wave 3 may start soon which would eventually break the March low. Given the fact that the market is extremely overbought, one should be cautious for the long position and take profit if possible. On the following hourly chart, wave 5 from previous swing low may have completed, and more pullback is expected. This is also supported by the negative divergence on several technical indicators.
SPX daily 
SPX hourly
The market breadth signals seem quite healthy. Although SPX was negative today, TRIN was reasonably low while CPC was closed at 0.75 which is very bullish. QQQQ seems weaker than other sectors, but the ascending trendline is intact, and the ascending triangle has a chance to breakout at the upside (refer to 1.1.5 PowerShares QQQ Trust (QQQQ 30 min)). Financial sector consolidated a bit with very low volume. The crude oil has consolidated for several days and didn’t go anywhere. However we should keep an eye on US dollar, if the bounce back up from the support turns out to be a trend reversal, financials will be affected.
In my opinion, the market is bullish and the trend is up. Before the big trend is confirmed to be reversed, the basic strategy is to buy dip. However, in the short term the market is overbought and we may see more pullback in coming days.
