Well the market found a 3rd option. I did, however, state that a closing of the gap would limit the bearish potential, and boy did it. I got worried as the day wore on and no more selling came back into the market, but even with that said, I still got my fingers burned on the end of day reversal. Boy do I hate those.
To be honest the only logical way to label the move so far is the beginning leg of a corrective move. The correction off of the top was too shallow to make it a subdivision off of such a large move (from 2/25 low), but on the other hand the strength of the move at the end of the day was clearly impulsive (so far). We went down too far to call it a 5th wave subdivision unless the triangle is labeled incorrectly, but if you do it any other way you only get 3 waves out of the triangle, so that doesn't make sense either.
So with that said, be cautious. While we did break the 34 hourly SMA, the market kind of shrugged it off at the end of the day. Tomorrow is another fed day, so we probably won't have much bearish movement until after the announcement (if any). Key support remains 1132 and critical support at 1116.
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