5 Aug 2014

Target has been hit yet again.  The EW structure seems complete and our ST has changed directions.  This does not mean we should go long, but to watch for a reset to the downside.  Our clue will be to see the ST change back down once it reaches near overbought with the MT still pointing down.  The Fib. 61.8% retracement shows a possible 1960 level for a pull back rally. 

This is getting exciting for the bears as the structure indicates that an complete 5 wave pattern suggests that a 3rd wave move lower would be larger, and faster than the current trend lower from the highs made in late July.  Of course nothing is for certain but this clue is promising.  We should also note that the structure could subdivide into a 1-2, i-ii scenario.

Be also careful of our PA as it is pointing at any acceleration to the downside.  So I would not recommend going long till this has at least cleared to a neutral or up position.

MT: DOWN
ST: UP
PA: DOWN