What a day today was. This daily chart level of the $SPX shows that the decline gained momentum, as measured by by the ROC. Volume was the highest since 5/2010 and has been increasing from 1346.1, a clear sign that institutions are dumping shrs (distribution days) at an alarming rate. In such cases, one doesn't want to be in front of that train wreck.
Here is the chart I showed in this weekends video. I had mentioned that I was taking a more conservative approach by using a less aggressive wave count and that I didn't think that the market would make another low UNLESS the move was a fake out.
Clearly, the failure of the market to make a larger w.4 bounce indicates that a more aggressive count is in order. W.3 red is the extended wave of w.(1) {not complete or shown} but determining which wave is extended within w.3 of w.(1) is practically impossible to identify at this juncture. My best guess, is that the market is still subdividing within a 3rd of w.3 as the past two trading sessions were the steepest declines and traveled the greatest distance in the least time. The technicals show above seem to confirm this opinion.
BOTTOM LINE: As soon as I can identify a significant turn, I'll discuss it's implications as well as provide an updated wave count. Until then expect the market decline to continue, even though it's severely oversold.
Best of Trading
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