The market rallied above the 61.8% retracement level of i noted in Thursday's update, but prices came back down immediately crossing Thursday's swing high near the close in the process. It is very difficult to view the rally since Thursday as impulsive action, even if there are 3 sets of 1-2 waves higher. This is key. The short term count is still bearish.
On a larger scale, the action since the 1/18 high looks like one wave lower. This alone suggests at least one additional wave lower.
It is possible a flat or triangle is unfolding since 1/18, but this will be out of proportion with the waves since late November. A better alternate is a multi-week correction that will be proportional to the November correction. This still suggests additional downside in the coming days however.
No matter how you count it, there is good reason to believe the rally since late August is coming to an end if it has not done so already. The December-January leg has had less momentum than the September-November leg.
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