Essentially, the table has been set. We know the levels... bearish below 1252.25 and bullish above 1352.75.
Looking back on today's wild ride, the bullish move was called for in the weekend video. My intraday levels for the retracement were 1307.5 - 1321.25 (not shown on chart). In the ON session, prices actually reached beyond the first target to 1309.5 before failing. Once the daily session began, within the first five minutes of trade, the market had gapped up to 1304.75 and then proceeded to lose all bullish momentum. It fell hard in response to a poor ISM number, as fear of a double dip recession are starting to emerge... or was it also that the the market hit a wall at the 50 sma that even I missed?
Even though the market closed off the lows, price is now below the 200 sma. As I stated in my weekend video, " institutional investors may not be willing to defend their positions". Tomorrow will be a defining moment for them. What they do will certainly influence trade in either direction.
I can make a case that we made five completed waves in today's session but I need to see tomorrow's trade to more accurately determine how today's move fits into the larger wave pattern. I'll update readers with my thoughts as soon as I am able to draw a high confidence conclusion. Until then look up in a three wave affair to typical .5 - .618 retracement levels.
Best of Trading
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