Now all along, what I’ve been anticipating has been some kind of head and shoulders top (in blue) within the “head” of a much larger head and shoulders (in red).

Now, we’ve taken out the high on cash. But the same sort of idea can work. We wouldn’t call it a head and shoulders, strictly-speaking, as the right shoulder shouldn’t make a new high, but that doesn’t mean the structure still isn’t terminal. It’s still “3 drives at a high.” And, if we fall, it can still be a topping process:

Now, it’s a terrible squeeze, and I don’t know if it’s going to stop and reverse here. We can still tag the 200-day SMA directly, if we get followthrough, we can even go to the red trend line. I don’t know. I was hoping this rally was going to be a Green 2, coming later, and I had wanted to participate in it on the long side. But the only way I participated was negatively, having closed the large majority of my puts below us in the triangle-like structure. So, phooey that I was expecting this in a few days and not here.

So, if sellers show up here, now that they’re clearing overhead liquidity, this may still be part of this large topping process I have been expecting to unfold.

If we keep going up, and especially if we retake the red trend line, I will have to abandon this thought. Above that trend line, and I think we may end up going much higher, though I don’t have a greater count developed that can support that yet. But, that’s the main down trend line, and if we breach that, it’s got to mean something. So, hopefully, sellers show up before then, because I can explain that given the market fundamentals. Above that will be a little hard to try to explain. A Fed picot would help, but we don’t seem to be anywhere near one of those.

The only other thing I can see right now is this. Since we didn’t break down from the triangle-looking consolidation we were in (here), it’s possible that that consolidation was simply part of Green 2 already. And, I dunno, Powell’s message seemed consistent. I don’t see anything particularly bullish.

But, if it’s a Green 2 finishing very early, it could be this:

We are in the range of a 2 (50-61.8% retracement). If it’s a 2, I wouldn’t want to see it go much higher. So, if they’re just squeezing out shorts before another drop, this is possible. Otherwise, maybe we’re still headed for an actual touch of the 200-day. But, I rolled my puts earlier, and I will add to them here, and wait to see what happens.

So, hum. I have been hoping to see the diagonal form, but it’s not seeming to (the red structure). And instead, we’re sort of forming a descending triangle perhaps (the green structure):

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I don’t see any good reason to change my views here. I think the structure I’ve been discussing (e.g., here) remains a good option. It will give the topping process a good “look.”

Now, within that, we should be in Blue 2. We have probably completed orange a and orange b and are waiting on the c:

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