I realize that with a daily post I need to say something all the time. Also, there is an expectation for an updated EW count with each post. However, after looking at the price action today, things are a bit unclear. So with that said, this what I am watching:
- 34 hourly SMA (currently at 896) should provide significant resistance to any upward move. If it doesn't then something is probably wrong.
- We broke through key support today, but couldn't keep price down. Price closed right at the bottom of the zone (still bearish).
- There is the possibility of a 1:1 wave parity at 864 for a complete A-B-C correction.
- The short term bias is still down as long as price stays below 930.
- Without a panic day (>4% down), I will continue to believe this sell off has been orderly and look to go long in the 815-840 area.
- The financials closed below a key level today (XLF below 11.20)
With that said, at this point I will stay the course. My plan still stands to begin taking profits and selling covered calls at the 850 area.
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Rich,
ReplyDeleteSome indicators are calling for a bounce. If we do , where are we most likely to do so? The 34 SMA? and how would the wave be labeled?
In other words, how are you expecting Wave C to unfold? I suspect not a straight drop to its final destination of 815-840
Sprat, certainly that is the hard part about where we are: the indicators are showing a bounce while the wave count still shows a lot of weakness ahead. That being said, I am watching the 34 hourly SMA and the 890 area for major resistance. If price gets above those, then the selloff has become too orderly for a wave 3. The next place to look would be the upper channel line (I did not include on my chart but you can draw a nice parallel channel on the hourly chart) for resistance around 918.
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