Sunday night in the futures shortly after they opened the market tanked. The 6100 zone didn't hold so next will be the 6065 level, and if we get that deep I'd look for a strong rally up either before the FOMC this Wednesday, or possibly after it. It depends on how long it takes to bottom out and turn back up.
If we get it done today then we can rally up tomorrow and go into the meeting at some midpoint zone, which is likely a B wave bounce with the decline being the A wave. We'd then see a quick C wave down to a pierce of 6000 to complete the ABC move. From there I'd look for one more strong rally up to a new all time high into early next week as if we get down below 6000 Wednesday the short term charts will be oversold enough to launch a squeeze back up.
As for the meeting, it should only spark the last drop to lure in some more bears to squeeze and shake out any bulls that buy the lows today.
Basically if we reverse back up today into Tuesday or Wednesday for a lower high then we did an A wave down into today's low, a B wave up up into the FOMC, and a C wave down afterwards. Then one last rally into the first week of February to end it before a bigger down move starts and last probably into April or May.
The alternative would be that the "so called" B wave doesn't happen and instead the entire pullback ends today, which is an ABC on a smaller degree, with the C down being the Sunday night gap open. That would then say that the first move up, which will hit strong resistance now at the "gap window" (6105) and of course "gap fill", will just be the wave 1 up before the FOMC. Then a small pullback Tuesday for a wave 2 and the wave 3 up happens after the FOMC
When I look at the 2hr and 6hr charts they are telling me that the down move could be finished today and it's up to a new all time high after the FOMC Wednesday to complete a final 5 wave push.
If I'm wrong on that then we'll see another lower low first, like below 6000, which would be the C wave of course, and then we rally up in 5 final waves toward 6200+, but I have to think that this time will be different then the 12/18 drop, that bounce small the next day and put in a lower low afterwards. I think they are going to switch it up this time around and make a higher low on an pullback Tuesday or Wednesday, which would be my wave 2 path with wave 3 after the FOMC.
Have a blessed day.
