My RSI(5) indicator never exceeded my 3rd wave extreme on my hourly chart (10.07 vs today's 13.75) making this morning's move a 5th wave washout. There are lots of momentum divergences on the hourly chart at this point, which leads to the bulls making an attempt to test the breakdown pivot (1098) and possibly close the gap (1103) tomorrow. There is a ton of overhead resistance between 1100 and 1103 btw, so that is the target short entry. If they don't, then look for a massive sell-off tomorrow as the market ignores the divergences and pushes this a lot lower.
The channel that has been created with the move down thus far should be broken after we test the breakdown (assuming of course that the test fails) as we have some real wave 3 acceleration.
Should this be our dreaded larger degree 'B' wave, then look for a test of today's low to hold after a failed test (once again assuming that it fails) of the breakdown somewhere in the 1085 area. Should the market successfully get above 1103 and stay there, then I would reverse my stance and look for another rally high.
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