Small Wave 5 down was completed yesterday (see chart below)…most likely we now  rally back up as part of an ABC pattern (up-down-up). Remember, patterns of late have seen declines moving down in 5 waves and rallies in 3. This tells us despite the bounce, the primary direction (until we see something change) is down.

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Worth noting…

1. Still bullish crude, still bearish the US $…if correct and crude rallies back up as part of a Wave 5 (target $76), the SPX should push up again.
2. I believe most traders think the commodity trade is over…and it may very well be…but I think there’s another push up which would serve to frustate and confuse several traders who are selling as we speak.
3. Signals turning more bearish in the banks…important since the financials have been the key to this move off the March low…the BKX is probing support…if it breaks under $34, it sets up a C wave down, w/ a target to $30 (which is a pretty good correction)
4. Bank names to look at as shorts: PNC MTB NTRS CMA..they can all bounce a bit more, but offer good set ups to be sold.
5. Weekly charts of some of the NDX leaders showing that their price tops may be already in..PCLN, BIDU (see chart below)…PCLN can rally back to the prior high @ 120, or BIDU back to $300, but I wouldn’t be expecting much more.

Bottom line: We are in the process of making a short-term top…but the reversal comes from a higher level.

• most likely following the FOMC and end of the month/qtr mark up, but it can certainly happen sooner.
• target is $ 915 to 920. If it gets above 925, then there’s a chance we see another attack back up to the 950 area again…but once we complete this bounce, I think the better trade comes on the short side.