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Intraday Technical Update


Thx Scotto!

Important technical update. At the new lows today in all the major indices, we now have a "5" wave move down from Monday's peaks. In our yesterday full note we suggested that we'd want to see another up-down sequence and yesterday's and today's action has provided just that action. There are a number of short term and longer term implications to this, all of them potentially bearish. Tomorrow's note will focus on the longer term bearish implications but for now this intraday note will focus on the short term implications.

Specifically, a completed impulse wave down from Monday's high can be considered complete now in all the major indices. As a result, we can now expect a mean reverting bounce for 1-3 sessions (most probably off a "better than expected" employment number tomorrow) that does not make a new peak and stalls at one of the Fibonacci resistances. Those resistances are roughly speaking INDU 10695-10775, SPX 1195-1205, NDX 1585-1605, SOX 415-425, and RTY 630-640 into early next week. If the move into those resistances is 3 waves and overlapped, that will strongly suggest that the bounce is a mean-reverting bounce that will be entirely retraced and new lows (perhaps substantial new lows) will soon be seen. (Not advice). Some very important action taking place in the markets, as important as at least the action that took place around the August 13th lows if not the January 04 peaks. Stay it's getting interesting.
No positions in stocks mentioned.

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