Note: the following analysis is formulated as an assimilation of Fibonacci, DeMark, Elliott Wave and other technical indicators. It is offered as education and not intended as advice in any way.
We have been patiently waiting for a corrective looking (3 waves) bounce to take prices for all the major indices into Fibonacci resistance areas; as of yesterday's peaks, only the SPX has in fact entered into that core 38.2%-61.8% retrace zone: the INDU, NDX, and RTY have all (as yet) failed to enter into this important resistance zone. Will they before the next important impulsive leg lower begins?
That remains the key question today. One of the key determinants of the answer lies with the wave form thus far off the lows struck on the 12th. Though each index is slightly different, it appears that there are two possibilities: (1) one more small degree 'down-up' sequence that finds a peak in today's session could be the final wave pattern in the corrective bounce we have been looking for or (2) some sort of extended wave takes prices more meaningfully into the resistance zones over the next several sessions.
The technicals currently suggest option #1 is the more probable, therefore, if we get a small 'down-up' sequence in the intraday chart today and that subsequent peak registers with some momentum divergences in the Fibonacci resistance zones we mentioned above, then that will be a good risk/reward point to position for weakness in our view. The expectation for the next wave down is one of equal or (probably) greater magnitude than the move down from the Jan 3rd peaks to the lows on the 11th. So today's action may well provide the entry point we have been looking for over the last week (not advice). A move through the peaks registered on Jan 3rd would force us to stand aside and re-evaluate this bearish view but until then we remain bearish against those peaks and anticipate another meaningful impulsive move lower soon.
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