Hello Everyone,
Yesterday after the close I posted several charts and associated comments relating to a specific pattern (expanding flat). I then illustrated two specific scenarios - both of which suggested lower prices (at least initially) from Wednesday's close. The primary scenario that aligned with the expanding flat argued for NEW LOWS immediately while the other option suggested a pullback (50% retracement). This morning I posted key support level on ES 3680 which was lost and down she went to new lows. Below are my thoughts for tomorrow ahead of the important PCE report.
Since Last Friday - the SPX has simply chopped in a range (albeit over 100 points) and it's simply not clear to me tonight (corrective waves can take so many forms that I AVOID unless I have a valid risk reward like last night). The problem with today's decline is it shows 3 waves down so that implies some type of flat or triangle likely. Other option would be Wave 5 began today and will subdivide.
Market made a divergent low again today on many time frames so that supported the bounce - what unfolds tomorrow will be largely from the reaction to the PCE report. The time to be aggressive is on the onset of wave 3's or C when present. If anything, the divergences today at the lows favored some bounce.
Making no big bets and enjoying the spoils from last night.
Please take a moment to look at the trade ideas.
