We had a volatile day in the cash s&p500 yesterday. After a sharp sell off to a new low for the move down from 10/11 the bulls came charging in and rallied us strongly upward. When the dust cleared we still had a downtrending day! This caused a new price pulse to be formed from Tuesday’s high and we now have five pulses (not Elliott waves) down from the 10/11 high.)
Yesterday’s low and then sharp reversal came at the end of the time period where I was expecting a short-term (or greater) turning point. Due to that fact I have raised the stop on my remaining SH position to 58.99. If new lows are directly ahead then the odds become much higher that an a-b-c correction is not the correct interpretation from the high. Today’s chart shows a slightly tweaked zigzag when compared to yesterday (moved waves a and b over by one day). However, this zigzag shows nice symmetry where wave c is a Fibonacci relationship to wave a.
Bottom Line: I will let the market will take me out of my remaining SH position; my focus is finding a place to go long SPY here. That place is yet to be found as I don’t have a technical “buy” or even a price fractal low or Change-In-Trend (CIT) of the price pulses.
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