Well, another down day starting off this morning. We had an intraday FP on the SPY yesterday showing 266.75 but we are already lower then that right now in the premarket, so at this point I'm unsure if that's going to be a level it turns at and bounces. Normally FP's are hit and then a turn the opposite direction starts, so that would of course be up today since it's now hit in the premarket. I have my doubts on that happening now and will just let the bulls prove themselves to me at this point.
We've been tracking the 1987 path for awhile now, so days are almost exact, and others not but still in the same overall pattern. If we don't retrace 38.2%-50% of the move down starting yesterday at some point today then we'll be off that "exact match day" path but remain on the overall pattern for 1987. To continue on the path we need to gap down hard again on Wednesday with the Jan/Feb prior lows in mind as a target. Then this coming Friday (and/or Monday?) the big drop could happen.
That's if we continue to follow the path "day for day", which doesn't seem likely to me, but more then likely is we follow the same pattern with most days the same and some days off a little but the overall big picture is the same. So, if there's a rally today I'd look for that consolation zone tops from yesterday to be the top... which is the 269-270 SPY area. A quick pierce of that level to take out any shorts and lure in bears might happen? Then rolling back down into the close today would be required for an exact match of the 87 path, versus just staying down all day today which would be just staying with the same pattern of having a down day today. It's a very tricky time right now so I'll just play it by ear and update everyone in the chatroom as I see things change. But for now the odds aren't good for any bounce back up that high. If it happens, great. If not, I'm happy with the shorts I have. Good luck to all.
