This pattern played out nicely this afternoon (highlighting is the possible wave 4 as I saw it then). We’ll see if there’s any follow through tomorrow. Would be nice to see a clean final wave down on diverging RSI to set us up for a rally.
Source: prophet.net
I think a lot of bears are waiting for a push to the 10,500 – 10,600 area. To be precise, I’d keep an eye on 10,480 – 10,575, since the market sliced right through it on the way down. The market doesn’t owe us a good retracement though — in April 1930 the first two weeks of decline were left in the dust. It was just get short or get left out. Same goes for late May, 2008 as minor wave 2 of primary 1 rolled over. The nature of third waves is not to give you an opportunity to get on board.