Major indices are on the verge of something bigger. If the decline does not stop here or little lower and the indices make a new low (lower than the September low), they would open a path to a very significant decline, possibly 20+%.
The perspectives were shared a few days ago in the study on $RUT:
Let’s evaluate the perspectives of candles and waves.
The daily candles are strong continuation candles. However, they are vulnerable to any, even minor bounce, that could form the bullish combos.
DJIA is strongly oversold and the volume in SPX and DJIA fell compared to yesterday, meaning that there is a good chance of a green candle tomorrow.
SPX precisely hit the target area that I indicated two days ago. Now it retraced exactly 0.5 of the rally off the September low and this could be a strong turning point.
Primary path: Green
Possible zigzag. The current wave could move further down towards $4400-4450 and is expected to reverse there. The character of wave off the low would be critical. If it is corrective, a good chance that the correction is not over.
DJIA is also moving as charted two days ago. It looks like it could drop further down to $33400-33300 area before a bounce.
Similarly to SXP, the character and the structure of the bounce would be critical. |
Previous update with details:
Follow the blog in Twitter @InvestingAngles or by email subscription.