Hmm. Very interesting today.
I'm still a little unsure of the short term options, at least which one I favor more. One thing I do know is that with the neg news (ISM and still no fiscal cliff news), the market should have sold off more.
The 50 day SMA provided the expected resistance today. Will it consolidate under here before punching thru?
The fact that it has only pulled back to the lower TL of the diagonal, I'm leaning towards at least another bounce off the TL. How high will be the question.
Gray marked today's high as a complete leading diagonal. However, because the market found support at the lower TL, we must be mindful of one more push higher.
I don't have time to focus on the squiggles, but there may be a way to count five waves down off today's high (I would lean more towards a double zigzag tho). Naturally, a wave 2 bounce would follow that would move to 1418 if a 62% retracement is to be expected.