Some of my readers will recognize my previous work from the Reversion to the Unified Mean (RUM) Wave blog. I wrote it in relative anonymity for a couple years. That work can now be found here.
Today's market action was another strong day for the Bulls. Primary Indicators 1 and 2 as well as the Very Short Term Indicator are all in the red zone and the numbers behind the Leading Directional Indicator showed a hint of a slowdown today. With that said, I do think the market wants to make some new highs here. Investors should carefully consider their desired profit taking points if using a trailing stop.
The SPY chart below shows the price action reaching the "tail" of the price node (turquoise horizontal bars.) This indicates that there are not many participants at this price level. As such, I would expect a lower volume day tomorrow as investors watch to see whether or not the market continues to new highs or retreats back toward the areas of larger volume. The Fib retracement lines (purple) are the same ones I drew yesterday. If the market does pull back, a probable pattern would be some sort of A-B-C Elliot Wave correction to the yellow dashed line which was our last area of resistance (which would now be support.) That would approximately correlate to a 38.2% Fib retracement line.