Previously I left readers with bullish and bearish wave counts. The above chart has been eliminated as the 1305 low was reached beyond the maximum extensions for corrective patterns. Secondly, the ensuing price action is corrective rather than impulsive.
Therefore, the following chart(s)... contain scenarios for tomorrows session.
The preferred count has w.(i) complete where w.(ii) is unfolding in a sharp zig-zag correction that should terminate at 1320.5 to 1324. This interpretation is invalidated with a print below critical support or 1305.
Other alternates include:
Under this alternative, w.(ii) ended and prices should decline from the onset of tomorrow's open as w.(iii) down draws price significantly lower. Watch the ON session for hints that this interpretation was unfolding. As before, the interpretation is invalidated with a print above critical resistance or 1317.50.
The final alternative also has prices moving to the upside tomorrow as w.(ii) is an expanded flat correction, although not perfect in form, that should terminate between the heavy resistance levels surrounding 1320.5-1324. Once again, as in each scenario, this interpretation is invalidated with a print below critical support or 1305.
In summary, a break of 1305 opens the down to significantly lower prices while a rally to 1320.5-1324 only postpones the fact that the direction of the market is clearly down at this point.
Critical support of 1305 has been broken to the downside opening the door for w.(iii) formation. The gap open is typical of third wave personalities yet we need to see long range bars down on increasing volume to confirm that we are witnessing a third wave move.
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