In the course of taking a much needed rest, it retraced 50% of the cycle beginning at 2064 and extending to recent highs. And after hours, it dipped lower in the market.
We also spoke of catalysts and the , which finally edged up to over 100 provided a good to reason to be short in addition to red all over the place. And oil , which the market has been highly correlated with, took a breather on a modest increase in the dollar following dovish comments from “whatever it takes” Mario.
Based upon past experience, I expect the market to play around in the current cycle (band) maybe and retrace ½ of today’s losses before resuming its slide down to slightly lower levels during RTH . I think it’s headed to point D, which is located between two key retracement levels, while forming a with pretty decent ratios, not textbook but decent.
In addition to 2075 to 2080 being a tough nut to crack, it’s unlikely for the bulls to allow the $SPX to drop below a level. And 2064 would be off the table as now we are talking about structure however small the time frame.
If correct, this would provide the foundation for the bulls to take a stab at higher levels although there is increasing worries about the economy and . http://www.marketwatch.com/story/has-the-sp-500-finally-reached-overbought-levels-2016-04-15?mod=MW_story_recommended_default&Link=obnetwork
Thanks for reading and any feedback.