A down move has started

Looks like my call for one more nominal high was the right one to make. Today's move was able to keep the bulls on the defensive for most of the day and well enough into the close. The question right now is how to label the move. In all cases it means lower prices ahead, but it will help in determining where prices might end. Essentially the three counts are:


(1) a-b-c with c=a*.786 to complete our first 'a' wave. This is the simplist way to measure the move down, and so it will be my preferred count until price action proves otherwise. In this scenario we are currently in a 'b' wave that can end pretty much anywhere. Where it shouldn't go is higher than 1005.


(2) 1-2, 1-2. This of course means that tomorrow should be a doosy to the downside. Upside from here should be limited to 999.


(3) 1-2 with wave 2 being made up of an irregular flat. From here upside should be limited to about 1002.

So no matter how you look at it prices should get considerably weaker by Friday afternoon if not earlier and continue all of next week. Should prices go beyond 1005, then we likely finished a minor wave B and will be in our last leg of this bear rally. For my own positions, I added some more FAZ (25.50) and XLF Aug puts (.41). I'll be adding to other positions tomorrow hopefully between where we closed and 1002.