SPY Will Gap to 50% Retrace, Possibly Dump from There

I am expecting wave 3 (of 1 of 3) of the bear market to begin. Big wave 1 was the crash, 2 was the rally, and 3 started the other day, I believe. The initial move down was wave 1 of 1 that wave 3, and the rally from yesterday to today is wave 2 of 1 of 3, I believe. For the wave 2 correction to complete, I am looking for it to retrace to between 38.2% and 50% of the initial move down that we just had.

It looks like it will be gapping to within a hair's breadth of the 50% retracement. It's possible that it will run to the 61.8%, but it could also gap and crap this morning. Once it starts going down, it's going to pick up in intensity.

עסקה פעילה:

SPY went all the way to the 61.8% retracement and even exceeded it a little bit. On the ES chart, a head and shoulders pattern is emerging, as I pointed out the other day, and none of this rally is unexpected. The right shoulder of the head and shoulders pattern is developing. Also, in the ES chart, a bearish rising wedge is forming. So, we just need to be patient, and wait for the buyers to become exhausted.

עסקה פעילה:

The nice, rounded top formed around 11:15-11:20 (Central Time) was quite possibly the top of the right shoulder. Looks good so far. Let's see if there is some profit taking this afternoon.

עסקה פעילה:

Incidentally, the strength of today's rally closed the gap that formed from the other day's gap down. Closing that gap will allow the market to fall even further when it does fall. A silver lining for the bears.

עסקה פעילה:

Buckle up bears. A beautiful bear flag just broke on the 1 minute chart. I think we're gonna move!

עסקה פעילה:

And that big multi-day rising wedge on the ES futures just broke too. Lookin' good!

הערה:

lol Now that, my friends, is what I expect a wave 3 to look like. (2:15 CST)

הערה:

LOL wave 3's are such drama queens