So we got the sell off earlier than I had expected but perhaps what we saw today could be counted as the bearish 5th wave as opposed to the one on Thursday. So I am still looking to a retrace to the area on the chart to test the bearish trendline/TA and then resume another 5 waves down which should take out the 1275 support. The next support after 1275 is 1255 but in all, I am looking for a correction to the 1180-1220 area before bottoming. Obviously, it is too early to tell as we could still put in another leg up for a new high for the year but probabilities are now low. As long as the market keeps under the TA, stay in cash or stay short. I sold longs on Friday to lock in profits in case we had a sell off like the one we had today but I still have another batch to sell when the market retraces. The short term movements of markets work on sentiment more than they do on economic facts and all these negatives should send sentiment to an extreme oversold condition eventually (perhaps this summer?) and then will be a good time to buy. The guys who were buying in February will probably be selling by then, it's unfortunate (for them) but this depression/mania cycle is actually predictable.
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