I was wrong in my assumption the market had topped yesterday but still right on the correction and very possibly the top I have been calling for the past week for the wave structure from 1343. In the morning, it seemed like the market was headed for a bullish breakout I mentioned yesterday as a possibility but then the reversal was so swift and strong that all gains were given up and the 1662 support seemed like it wasn't even there. However, the market did manage to hold on the second support level and close right on the Trend Average, a level which by the way the market has not seen in 3 weeks. At this point I am looking for a top confirmation by the Trend Average, so ideally the market will bounce in a bearish W4 and then go down some more to test the 1625-1635 area. That would allow the TA to turn bearish and confirm what I had been expecting since the rally started in January, an LT Int W3 top in May and if that turns out to be the case then I will be watching 1580 as the end of the W4 correction as that is the ideal target. Lastly, I forgot to add a bounce that rallies past 1674 will invalidate the bearish 5 wave count but I doubt the market will rally that much.
I ended up selling my VXX position at break even at the break of yesterday's high since I assumed we would see 1700's. But once the reversal came and lower lows were put in, I waited until the end of the day to load back up on VXX at a higher price (unfortunately). It would be a shame if I were to miss a substantial correction which I had been calling for weeks. So my new VXX price is $18.53 as compared to $18.32, not too bad considering the market dropped almost 40 points in a single day.
Main S&P 500 Trends
Short Term Trend = Bullish trend being challenged
Medium Term Trend = Bullish
Long Term Trend = Bullish
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