The rally up yesterday got sold back off again this morning it seems. I'm having my doubts on the bounce back up to the falling light blue trendline. It's looking more likely that we'll stay in this range that we've been in all week until the short term charts get overbought enough to rollover and start the next big leg down in the market.
This happened in reverse when the market was in rally mode for the last year, where the the daily, weekly and monthly charts keep pushing the market higher but would stall out when the 6hr,4hr and 2hr charts got too overbought.
The market would chop in a range then and let those short term charts fall back down to oversold (or just neutral) and then they would turn them back up and continue the rally higher. This time the market is waiting for those short term charts to come up enough from oversold to at least reach neutral, which is basically where they are at now, or get overbought.
Then the daily and weekly chart can continue with the push lower. My thoughts are that today or tomorrow will be the last day in this range and we'll break the low and continue down hard into all of next week. There's a possible FP on the SPY from 4am this morning for 431.91, which is roughly 4320 on the ES/SPX.
My guess is that's where we'll go today and stall out at, then rollover tomorrow. I would love to see a rally up to the falling light blue trendline to short it at, but I just don't think SkyNet will make it that easy. It rarely gives trapped traders an easy way out or in when they missed a move. Bears missed the short from the 9/24 bounce high and bulls are trapped from buying the low and expecting the big rally.
It's not likely going to happen in my opinion. In fact the low this morning, with the low on Monday and the low last Thursday make a perfect "M" pattern. A move up to the possible FP on the SPY would make the left side of the "A" in this "MA pattern", and what would follow next is that right side of the "A"... which would be some kind of wave 3 or C down in Elliottwave. It's the nasty one that will break the current triple bottom and panic the trapped bulls. Next week looks like a blood bath to me. Today's expected bounce to that FP is likely the last bounce before the carnage begins. Have a blessed day.