Yesterday bulls got butchered. After the enthusiasm in pre market trading in response to the financial 'aid' to Spain, markets turned down as smart money sold the news. Now that short term lagging bulls are out of the picture (as short term lagging bears during the 12050-12650 move), the wave structure as wave B might already be complete. Now we expect an upward wave C. Wave A paused at the 38% retracement and a sideways movement as wave B followed. A move above 12600 cash DJI will confirm that we are in wave C. However there is high possibility that this move is minor wave 2 and that's why bulls should be very cautious as a larger degree wave 3 down is expected. This scenario is depicted in the following chart.
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