I can't believe I am in the condition of saying that a 7 pt drop on the SPX is timid or bland at best. I guess it's all because I have gotten use to double digit volatility. The EW A=C target I was looking for is around the 1999 level and prices are responding to this by pulling back from earlier this morning. The SPX might still get another chance tomorrow to try for that level in which I would label it a C-wave subwave of either a 4th or a 2nd. The latter would be much more bearish of course. With this C-wave, I am expecting a 3 wave structure instead of a 5 wave impulse due to the fact that since the lows made in late Aug. prices have been sporting a 3 wave pattern as it oscillates sideways.
Indicators are still not in SYNC and trading a move like we had the past few days might seem like a great idea, but the abrupt surprise to the downside could be just as devastating. I am not a bearish person in nature, but knowing how the economy is and what our sentiment has been telling us, it is better to err on the side of caution and let the double digit rally run and just wait for a good setup that goes with the trend.
SEN: Bearish
ST: UP
PA: NA
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