Stocks have staged an impressive recovery from their July lows. SP100 and the Nasdaq Composite made new all-time highs and the Nasdaq 100 Index made new recovery highs. For the intermediate term, odds cwontinue to favor the wave E-up (our base case) in SP500 (Chart 1), and to a lesser extend, an even bullish wave 3 (Chart 2).
Near term, stocks appear overbought, especially in NDX, where four upward open gaps currently exist (Chart 3), against visible weakening in its internals (Chart 4).
Our tracking wave count place the pending high in NDX at wave 3 or wave C off its financial crisis low. See Chart 5 and Chart 6. A meaningful pullback is likely in sight.