So Far So Good, But Now What?

In line with my present thinking, we’ve resumed lower again. The part of this broad hypothesis that I am most confident about is the move from intermediate (orange) C to D:

Regarding that basic thought, I feel pretty good. That said, how we get from here to there can take a very great many paths, and I can’t foresee from here which one will be our fate easily.

If we’re in minor (green) A, that wave can be either a 3-, or 5-wave move (A-waves can be either). If it’s a 5-wave move (the blue waves), I would expect us to be in the 3rd of that now, and it should get us to the orange boxes (at least, if not even lower):

For the time being, that’s my primary thought. That we go down there, and I will try to see what things look like once we get there.

However, there are many other options as well. For instance, instead of having minute (blue) 1 & 2 complete (as above), it’s also possible that the first move down was already minor (green) A, and the bounce we had was minor (green) B. If that’s the case, then we could go straight to the lower green trend line in one full impulse wave, perhaps like this:

There are other variations as well. So, at any rate, it’s difficult to guess too much while we’re up here.

I’ll point out a couple of other things here too.

We can draw parallel rails up here, giving us a little bull flag:

It is a positive sign that we poked below the lower rail today. Bears will want to see this structure fail. The move off the high is such a nice, clean looking little zig-zag that I’m sort of counting on everybody seeing it, and expecting the next move to be up, while instead, it actually fails. It’s so obvious that I don’t trust it and I’m counting on others to trust it.

Lastly, in this weekend’s post (4th chart in that article) I pointed out a way we could draw a range on the S&P 500 letting us the see the midline rejection. And that’s the range we fell from today:

And zooming in, we can also see that the FOMC whipsaw involved an attempt to reenter it, and it was rejected:

All of this looks like good news for the bears to me, for the time being.