Gap Lower - Nothing Brutal Just Yet

The SPY 30--minute chart is below. There was a gap lower this morning, and lower lows followed in fast form. This was not at all unexpected.

But price only got to about the 62% retrace level of the prior up wave before deciding to stall out and start an upturn. So, as of this point, while the downside has been tweaked, there hasn't been too much to write home about yet.

You see, for a 'motive' wave lower, one wants to see it have enough power to break a prior low. So far that hasn't happened just yet. We want to see that prior low undercut as stated before and again shown above prior to labeling the down move.

The up-trending wave after the low can be counted as five-waves-up, so there might be another up wave to follow after some consolidation. We'll see.

Tomorrow is the FOMC report and press conference to follow. So, it can be a day full of whipsaws which argues for patience, caution and flexibility at this time.

Again, for now, nothing to the downside will surprise me. The weekly wave sequence can still be counted as Intermediate (A)/(1), (B)/(2) where (B) can become a triangle, or (2) might end with an ending diagonal C wave. However, this last scenario still needs a higher high third wave in the ES. The NQ ending diagonal can be considered completed however.

Have an excellent start to the evening,

TraderJoe