Wednesday, February 7, 2018

Poor Close

Market Outlook: Now Getting Higher Volatility
Market Indexes: Major U.S. Equity Indexes were lower; DJTA higher
SPX Candle: Higher High, Higher Low, Lower Close - Inverted Hammer Candle
FED Posture: Quantitative Tightening (QT)

It's not the end of days by any means, but equity markets did have a poor close today. Many equity indexes opened slightly lower, traded much higher intraday, and beginning around 11 AM started selling off to close the day lower.

SP500 Cash Index - Closing Lower After Trading Higher

For an upward Minor 4 triangle to form lots of patterns (like flat waves or internal triangle waves) can form overlapping structures. So nothing about today's action rules out a larger Minor 4 triangle fourth wave yet. But what if this is a minute (iv) correction, with minute (v) downward to follow? Price has not upwardly overlapped any critical waves, and it has not crossed the 62% upward retrace level that we might expect for the minor 4 triangle.

The EWO is red, and still below the zero level, and, as of this time, there are only three waves up - portions of which overlap downward. The downward overlaps are not critical, yet, and do not rule out further upward movement. But downward movement is not ruled out yet, either. So, patience and flexibility are still needed in the continued choppy conditions.

Have a good start to your evening.


  1. Because today's high retraced almost 50% of the entire decline, then it has done enough to say that 2873 to 2593 is a completed wave. That decline can be counted as either 3 down or 5 down. The rally today completed a corrective wave from 2593. So, the possibility exists that it declines another 280 points straight from today's high, which would complete a zig-zag and also complete a 50% retracement of the 2084 -2873 rally wave. Of course, it's also possible that today's high only completed wave a of a flat, which means it comes back down to 2593 and then back up to 2730 before another 280 point downward impulse wave occurs.