Today’s morning downward movement towards 1900 and subsequent bounce rally was expected.
As we predicted yesterday, the B-wave should go down towards the 1900 region before resuming uptrend. Today’s low was at 1899. We initiated our trade of the week for next week near those lows at 1903/1904
At the end of 2015, I posted this blog entry: S&P500 2015 Year in Review and 2016 Outlook – which included the following chart prediction:
Well, guess what – today about 2 months later – the weekly chart looks like we got that yellow wave 1 down and are potentially in a wave 2 retrace:
I thought we might break 1800 with wave 1 – but it’s also possible that it holds as support. Either way, we did get what looks like a wave 1 down. At this point, either the wave 1 down is followed by the recent wave 2 rally — or that wave 1 down was actually a wave C down and we will continue to rally beyond where we expect it to go – potentially to new highs. I am open to both possibilities and it really depends on how the pattern morphs on a daily basis.