While the 240-min chart below shows that the market has yet to recoup 05-Nobv’s 4712 all-time high needed to reaffirm the secular bull trend, we believe the extent of the past week’s recovery is sufficient to define 10-Nov’s 4625 low as the end or lower boundary of a suspected correction within the secular bull and a tighter risk parameter from which shorter-term traders can objectively rebase and manage the risk of a still-advised bullish policy and exposure.  As we’ll show below, a relapse below 4625 will render this level an initial counter-trend low and confirm a bearish divergence in daily momentum, exposing a larger-degree correction or possibly even a broader reversal lower.  Needless to say, a breakout above 4712 will reinstate the secular bull trend and reinforce 4625 as a tight but very objective bull risk parameter for shorter-term traders.

The daily log scale chart above shows the developing POTENTIAL for a bearish divergence in momentum that will be considered CONFIRMED to the point of non-bullish action on a failure below 4625.  The prospect that such a mo failure might also mean a complete 5-wave Elliott sequence from 01-Oct’s 4260 low would contribute to a peak/correction/reversal threat on a failure below 4625 as would historically frothy bullish sentiment/contrary opinion levels shown in the weekly log chart below.  And with NO levels of any technical merit between 4625 and at least former 4550-area resistance-turned-support from early-Sep, traders with tighter risk profiles are urged to pare or neutralize bullish exposure on a sub-4625 failure to reduce or circumvent the depths unknown of a correction or reversal lower thereafter.

From a long-term perspective, a failure below 07-Oct’s 4421 (minor 1st-Wave) high remains required to negate the impulsive integrity of a broader bullish count and raise the odds of a peak/reversal threat that could be major in scope.  Per such, this level remains intact as our key long-term risk parameter pertinent to longer-term institutional players and investors.  These issues considered, a bullish policy and exposure remain advised with a failure below 4625 required for shorter-term traders to take profits and move to the sidelines.  Longer-term players have the option of paring bullish exposure to more conservative levels on a sub-4625 failure, acknowledging and accepting whipsaw risk- back above whatever high is left in the wake of that admittedly short-term mo failure- in exchange for deeper nominal risk below 4421.  In lieu of such sub-4625 weakness, further and possibly accelerated gains to new another round of new all-time highs remains expected.