This May Have Only Been a Four on $SPY

Am still looking for a big market retracement, but:

  1. We so far only have parallel rails. It is preferable to have the second drop significantly larger than the first drop (from the 5th). Otherwise, this becomes merely bullish consolidation.
  2. I love the liquidation break, but by doing it in market hours instead of trapping bulls with a gap, this gives everyone a chance to get short while we’re still way up here at the highs, so we need to remain careful so as not to get trapped as bears.

Thus, until we get an even stronger move to the downside, there is risk that the green arrow may only have been a four of some degree.


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