Tuesday, 2/23/16 S&P500 Daily Analysis: Downside Possible Before Upside

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I thought there would be more room to the upside, but then there was a strong selloff after the market close yesterday.

If we were to continue higher over 1940 in the immediate term, we should not have close today on the low, which makes me think the below chart is more accurate.

Today’s S&P Hourly Chart

If this B-wave does play out, we could test 1900 again.

Because of the selloff that happened after the close yesterday and the the struggle at today’s market open to get higher than 1838 — I think we may be turning down before going up.

The action at the open — with the long candles and whiskers between 9:30 and 10am after a 1-2-3-4-5 pattern between 4am to 9am — is not a good sign for the upside. Also, the fact that that last rally before the close was sold into the close and shortly afterwards points to further downside before upside.

The next target could be where the prior support was at 1900.