Friday the 13th turned out pretty lame for the stock market. No volatility, no new low, no new highs. Well I guess one can be happy for a pause I guess.so what's next? According to the EW counts, todays move would be considered corrective. Many 3 wave patterns suggest we would break down on Monday. The question is, where would the support be. Many are labelling this as a small correction of some sort with a higher price to come, possibly by Wednesday when the Fed would speak. If this is the case then we should see 1680 to 1675 as the range for some sort of short term support for the SPX. Our Daily stochastics is still on overbought even though we have crossed down but prices could still rise. I would be inclined to remove all my short position until Wednesday or Thursday to see where the Fed thinks they can moves the markets.
We have a confirmed bullish Main-Trend for the indexes today, with the short-term trend switching to Bearish. They decided to flip their sentiments, so this is not exactly clear in telling us the best risk reward trade. Best to just stay out till it clears itself out.
Main-Trend: UP ( Confirmed)
(Note: our short-term trend signalled an UP trend as early as Sept. 3 which ended today. Our Main-trend [signalled DOWN on Aug 09th] was not so lucky since we were in a volatile move up and it usually cannot react fast enough. It doesn't mean however that the main trend is done going down. What it means is that with the whipsaw the best course of action is to wait it out until both trends are in agreement with each other.)