Steak... It's what's for dinner!
Well gang, the bears regained the ball the last hour of the day, after an early fumble at the open. It was a tough one, as may bears were sacked as the bulls ran the ball back up the field. But in the end, the bears took the ball back and regained all that lost yardard. It's about time!
Ok, so what's going to happen tomorrow? My best quess is a flat day, as no major news data is scheduled to be released. The housing starts at 10am could maybe cause more selling, but they would have too be really bad. I'm not expecting that to happen, but if it does... then all bets are off! This market will tank!
What we are looking for now is for the oversold 5, 15, 30, and 60 minute charts to go back up and work off those conditions. We want them to get overbought so we can get short again at a great spot. This could take a couple of days... especially for the 60 minute chart.
So, assuming there's no major bad data or news released tomorrow, I'd expect the market to try to get back up to the 1130-1135 area. Not making it up there will be very bearish, and will likely eliminate any chance the bulls have at the 1160-1170 spx area. Personally, I think the top is in, and there won't be any move to that level... but anything is possible.
I'm not sure what count this is, according to the elliottwave people, but it looks like our wave 3 down has started now. This could have been some sort of smaller wave 1 inside of it, and it might not be finished going down yet? This smaller wave 1 will of course be broken down into even smaller waves. The sell off into the close was likely a wave 3 inside it, and a wave 4 up tomorrow could be next?
Again, I'm no expert in EW patterns, but I do believe that we have some very ugly moves down coming over the next few weeks. So, getting short for a multiple week down move could be done after these short term oversold conditions are reset. Maybe tomorrow, or Monday? We'll just have to wait until we see what the tape does tomorrow.
For tomorrow, TrekTrader caught another FP of 113.40 spy in the afterhours session on quotetracker. I use Think Or Swim by Ameritrade, and I only see 113.18 print in the afterhours? So, we will just assume that we should see some upside tomorrow to at minimum... the lower print.
Then look at the charts to see if they are becoming overbought or still oversold to make any decisions on going short again. That might be the closing price level for tomorrow? And since it's not likely to work off all the oversold conditions on the 60 (and maybe the 30) minute charts until Monday, you might not want to get heavy short over the weekend?
I'd stay light just in case they try to screw the bears Monday morning. But, I'd want too have a few shorts... just in case they decide to stage some false flag event, or release some really bad news over the weekend... causing a gap down Monday.
I'm not expecting that to happen at this point, but I don't know what's going to happen tomorrow yet either. So, let's leave that for the weekend post. Ok, that's about it gang. Just keep your eyes out for more FP's and post them or email them to me if you get one.