Better than expected GDP announcement on Friday gave the market something to be happy about. S&P rallied to new two month highs reassuring bulls that the uptrend is back on track and the worst is behind. Eurozone fears were wiped away by the announced alertness of ECB officials. Intervention will be certain in order for EURO to survive and prosper.
Technically speaking the market continued its bounce that we were expecting and continues to trade inside our sideways trading range. Now that the market trades around the upper boundaries where strong resistance is found, traders should take their profits if not take a bet for another decline. From the elliott wave perspective, the market from June lows has not done any impulsive move that would counter the April-May 5 wave decline. The only bullish pattern that might explain this overlapping upward move from June lows, is the existence of multiple one-twos. This is my alternative wave count. 1325 cash would certainly be the stop for any long position in my opinion. Bears definite stop is 1422. However a move above 1400 will be an early sign that bulls are winning the upper hand and that new hghs lie ahead. Bears will regain strength after the break of 1353 and 1325.