Despite the positive ISM read, the U.S. markets traded on relatively light volume, advancing approximately 1% on Monday. The commodity market advanced during the U.S. session, while the dollar index extended the declines seen throughout the last half of year, but the market participation across all global markets signaled that today was not a day that too much was likely to go too far.

U.S. Trade: Following the pattern set during the prior week of trade, the U.S. futures market saw a very weak overnight session. The market continued to trade on a weaker momentum even after the opening bell of the cash market, even though the ISM Non-Manufacturing PMI showed that the service side of the U.S. economy expanded for the first time in a year. This gave a strong boost to the financial sector, which up 2% going into the close. The calls for banking weakness were addressed by upgrades from Goldman Sachs on a swath of financial companies.

With today's gain, the market advanced for the first time in four days, reversing one of the longest losing streaks of the last few months of trading. The prior week's sell-off came as markets priced in a weaker global recovery pace, and as some economic reports missed analysts' estimations. These releases included data from the U.S. labor market, which most analysts agree will act as a drag on the economic recovery, even when taken as a lagging indicator.
 
S&P Technical View:
Daily chart trend: Short possibilities. Main price points: 1075. Looking for: Wave 5 or C top

The wave count on the weekly chart, above, offers a question; is it wave 4 or not? The price structure on a daily chart is also showing two valid scenarios. On the left side of the chart below, it shows an impulse structure with five waves up from the 665 lows to the current highs. If this is the case, the wave 4 discussed on the weekly chart, above, will be rejected, since the fourth wave is a corrective wave, which means it cannot be sub-divided by a five wave move. However, in this scenario, a three wave push lower into a corrective blue wave 2, with a targets somewhere around 38.2%-50% Fibonacci support levels, is expected.

On the right side of the chart, we have a different picture, with a wave count that has a clear zig-zag correction, which is valid for a wave 4 scenario. In this case lower blue wave 5 will follow.

Overall, the current price structure signals for a turning point, since the market is trading on the top of wave 5 or wave C leg, around the Fibonacci resistance levels with the current top at 1075.