Does 810 count as a touch over 800? I admit it is a stretch, I was thinking of closer to 806, but I'll take it. We clearly moved down in the last 15 minutes of the day. All of the momentum indicators are now pointing down. I am watching for a five wave structure for this move down. I am looking for a low in the neighborhood of 750. It is possible we end the move at 775 and it is also possible the move extends towards 725. As the move unfolds the actual target will become clearer.
I remain fully short and will scale out on the way down beginning possibly in the 775 area. It depends how the move down takes place.
One important thing to note. Both the SPX AND the XLF closed today under EXTREMELY important prices. Both closed on a quarterly basis under the lows of the 2002 bear market. In trend analysis the closing and opening prices on the larger timeframes are of extreme importance. This close does not jive entirely with my views for a multi-month rally.
Due to this I will use more caution in playing the wave 3 up until it appears safe that it is indeed taking place. That is I will most likely scale into long positions and become fully long at higher prices than I anticipated earlier today. For example if we finish the next wave down at 750, I will not be 100% long until we close over 830. If I am correct this should not matter too much since I expect this move up to go well into the 900's.
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