Yesterday was a light volume pullback to just below the 38% retracement level. The close was not that great, but that could be expected after a sharp two-day rally.
Today's action is far more important to me. Price has hesitated thus far just below the 1944.90 high of yesterday.
If the expectation is a fifth wave to new all-time highs, the S&P should be in an impulse, having possibly completed wave 1 of 5. There could be more coiling in a wave 2 pullback, but if so, a strong wave 3 should form thereafter. If not, the possibility of further correction would grow considerably.
I don't like the fact that the German DAX broke its rising wedge. The rallies throughout the major European indexes look corrective thus far. I consider this to be fair warning for our markets. No longer am I playing with SPXL to the upside. I'm back to using SPY calls.
With further coiling, wave 2 could test into the 1918 area. 1904.78 should not be violated, however. The market would then need a strong, awe-inspiring rally to put the S&P back on track. Anything less would raise the odds of much lower prices in a longer correction.