Retracement of a down-trend versus new up-trend

As we mentioned in the previous blog, we expected $SPX to "go higher".

What we just had today was a 75% retracement of the 1,687 - 1,653 leg down from last week.

The question is whether today's move (up) is the beginning of a new leg up (that could go for another 60 points), or was this the "b" (retracement) of an a-b-c down? In this case, "a' would be an irregular-flat.

To answer our question, we looked at the $SPX daily and hourly charts:

- Daily: Indicators (MACD+stochastics) on this chart suggest that we are in a down-trend and hence today's "bounce up"is part of a larger wave down (a-b-c).

-Hourly: We do not have yet confirmation for exhaustion of this leg up that started last Thursday at 1,535, not the beginning of a new leg down ("c" wave).

Overall, we favor reading direction on daily charts and confirming signals on the hourly