What goes up must come down, right? That was a pretty quick retrace right back to the June 9th peak driven by the job's report FOMO. In just about 3 weeks the S&P negated 2 months of rally. IMO, still has more to go. Right now it looks like it might hang around this resistance level. I still feel like there is a bounce here, but it could just be a pause before another move down. I like the bounce so it can pump the RIS up so we can have a nice long downdraft to the 3050 range. As you can see, there is plenty of room in the down channel for this type of move.
The NASDAQ is down but not as much as the S&P. Once the NASDAQ makes a similar down move, the S&P will drop like a rock IMO.
hmmm, IMO NQ is OverSold and ready to pop, see my latest; it went down harder and sellers are exhausted; a bear trap.
SPX trades at support on 3230, it's exactly a 10% correction from 3588
thebrewer35
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@DaddySawbucks, I agree with you. I don't think the stocks will make it down to their RSI extreme levels (that would be too easy). If it does, I will pick up more, but I have been buying up the dips along the way ready for new ATH. Then I will sell and hold cash until the next major correction.
Dr_Roboto
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@thebrewer35, I expected a retest of the ATH for a double top since the initial drop in Sept. I would have expected it the week of Sept 9th time frame. I was not expecting this protracted slow grind down. I just don't see any shot at a new ATH at this point. See the chart in my comment for details. It seems to me that fresh ATH's is wishful thinking and a thing of the past. You are not going to see that level of FOMO again.
thebrewer35
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@Dr_Roboto, I disagree with you on the new ATH. We are currently in downtrend (IV) of (V) I for SPX. This dip has been expected based on Elliott Wave Forecast. There will be a run to new ATH, and the bears will get washed out. Then, the market will get dropped again once we hit new ATH again and bulls will get washed out (because they won't sell). A correction is coming, but it isn't yet.
Good luck trading, friend.
Dr_Roboto
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@thebrewer35, Waves are so hard to get right. Everyone seems to have their own count. My wave count shows that the Sept. ATH was then end of the motive wave from 2009. The ATH make a clear 5 wave motive sequence off the March low. The question in my mind is how will the corrective wave play out. More down before up. Do you see something wrong in my count? I still make a lot of mistakes. Any advice you could provide would be much appreciated.
Thanks and good luck
thebrewer35
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@Dr_Roboto, It is very difficult to see your chart due to the length of time that is on it. I can tell you this without seeing your chart - from the March lows, there was an impulse of 5, (1)-(5) waves up from March lows to June peak of ((1)). The drop in June was ((2)). Then, it rose up in 5 waves, (1)-(5), to the peak in September for ((3)). Based on this trajectory, we are currently in wave ((4)) correction. Once this correction completes, we will be in 5 clear swings up to ((5)) ending I.
Dr_Roboto
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@thebrewer35, thanks for your thoughts. I will take a look at your suggestions.
@DaddySawbucks, I am not sure I agree on NDX. It is not oversold at the 1D. Still has a ways to go. You can see the NDX clearly broke out of its up channel and is in correction. A 5 month rally is most likely not done correcting in 3 weeks. It should be closer to a 5-6 weeks (30% down compared to up). However, I do see a Hidden Bull flag in the RSI, and those are really good indicators of a rally. So I guess I half agree. As I noted above, I really feel the S&P needs a bounce up before any more selling. That may be because the NDX is going to make a rally. However, I see it as a bull trap not a bear trap.
DaddySawbucks
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@Dr_Roboto, I reckon you might be right; at least one more downleg left in it IMO
SPX trades at support on 3230, it's exactly a 10% correction from 3588