I remain optimistic—structurally—because of our recapturing some levels (e.g., here).
That said, I can still interpret the S&P in two ways.
If last week was a low, we would want to see an impulse wave (5 waves, 3 rallies with 2 pullbacks) develop off of that low. And Friday is a reasonable candidate for a leading diagonal (the red wedge). If it is part of a larger impulse wave, it would be the first of those 5 waves, and today would be the third. We would expect a “3” to go to the little orange box at a minimum (it may go higher) before consolidating for the 4th wave, then higher again for 5:
So, all of this looks good so far.
However, if we don’t get the full 5 waves, leading diagonals may also be “a” waves, and we would be looking perhaps at something like this, where this is a corrective rally, perhaps like this:
And complicating matters, the Russell (see this) still has a “bear flaggy” look to it:
So, in sum: there are still many options available to us here and I’m not perfectly convinced one way or another just yet. Sentiment and overconfidence by the bears incline me to expect much higher prices, but until we see some impulse waves across the board and we start taking out some prior levels and keep them, I will have to remain cautious. For instance, the H&S pointed out on Amazon the other day is still on the table today, as it could simply be developing its other shoulder.
As far as playing it all, I (personally) still have enough stuff pointing in just about all directions, and so I should survive just about anything that ends up developing. So, I will continue to observe in the hopes of seeing a development that gives me stronger directional confidence.