Projection Update

Today in the comments section for the prior post, a reader asked that this projection chart be updated. Here is the updated version, per request.

ES Futures - Daily - Break of Trend

If the FED decides to cut rates or some other significant policy action prolongs the Intermediate (B) wave, then the path above - while not required - is still viable. Again, it is possible we have, in fact, topped where the chart shows "Or Top" at the label shown as minute ((a)). If so, it could have topped in either the Intermediate (B) wave, or Intermediate (5) of the Primary ((5)) ending diagonal shown in yesterday's post.

This chart, again, just allows more time for more divergence against the NYSE Advance-Decline line. Some of the uncertainty is due to the following: none of us has really experienced live-and-in-person, an extended fifth wave in stocks (except perhaps in 2000).  And none of us would have the experience dealing with an extended fifth primary wave in an extended fifth cycle wave. So, we don't know how much divergence with various indicators is needed.

So, we will keep an open mind. Thus far, the sell off has been somewhat orderly. Yes, there is a large gap in the futures chart from the overnight opening gap down. And, again, those tend to fill more quickly than the gaps in the cash market. But, depending on the magnitude of the move down that the market has in mind, we are going to be as flexible as can be. Today's advance-decline statistics on the NYSE were 271 to 1639, or about 1-to-6. While that is in the "impulsive" category, it doesn't quite make the 1-to-9, or 1-to-10 which often qualifies as a "kick-off".

As for today, the market closed with negative bias below the 18-day SMA, and the daily slow stochastic lost its embedded status. So, as far as I can tell, the swing line has turned down, and it is valid because the close is below the 18-day SMA.  You can find that chart at this LINK.

Have a good start to your evening.

TraderJoe