Selling pressure continued today even though traders tried to buy the market at the open. The decline from the highs does not appear to be complete. The decline could be the start of w.3 as I depicted in the week in review or just a w.4 correction. The fact that selling pressure was on weak volume infers that the later is the preferred count. The daily chart show that w.4 should be a sideways affair since the rule of alternation apply whereas w.2 was a sharp correction and w.4 should then be either a triangle of flat correction. My target for the decline is 1153.25.
I've added another daily chart showing an indicator that Jeff Kennedy of EWI developed. Note what transpires as the black MOAD line drops below the purple 30 ma. Should this occur, a sizable sell off would occur. The indicator last made a similar cross right after the April top. I'll be keeping a close eye on this indicator as it confirms that more bearish scenario.
Finally, at the 60 min. chart level I've labeled the wave structure as well as included the corrective price channel. As long as price remains within the channel during the decline... the structure remains corrective. That would be consistent with the interpretation at the daily chart level.
Here's the market's position at the close:
Momentum: Remains OB but turning down on weekly. Daily and 60 min. time frames are bearish but nearing an OS condition.
Pattern: wave.iv of wave.c of wave.2.
Time: No analysis made.
Trade Strategy: Remain flat. Further downside is expected but limited in my opinion. Should daily and 60 min chart levels make a bullish momentum reversal, price should rally. Once that has exhausted itself I expect another wave of selling. I'll be looking to establish a bearish position as momentum indicators and price confirm a top is in place.
Best of Trading
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