However, there exists some small signs of potential bullishness. We have some positive divergence on the RSI of the 30 minute and 60 minute charts. We have negative divergence on the VIX. Market closed at support. A major bear move will wipe all this out of course.
So overall, I'm leaning for a bounce tomorrow, potentially bullish (c) wave up of a [b] wave expanded flat.
Now the obvious: The market closed beneath the H&S pattern neckline. Contrarian position: its a false break and recovers (for now) and, at the least, forms a second right shoulder.
Overall to be truthful, I have no dog in the current fight (haven't traded hardly at all in a while - I just have no time to daytrade with my job). My 401K is sold out long ago at a nice price in the 900's. So I am not trying to be biased although I have obviously been leaning toward a final P2 rally peak this summer. The one reason I lean toward that is because the experts, Elliott Wave International, supports that stance at the moment. So I have no reason to go against that particularly since I was looking for the high 900's which failed to materialize when I thought it might.
However I do go against their stance that a price retrace that goes to possibly 800 (damaging in my opinion) would still allow a higher P2 later this summer or in the fall or whatever. I just happen to think that if the start point of the second ZZ gets taken out (either 847 or 835 - not sure) then a triple ZZ to p2 peak ain't happening.
So that thinking leads me to believe a hard turn will come for the final rally to P2 peak without letting prices get too "out of hand". Whats that magic mark? Well, I like 864 as a low for this current downturn (Y=W). However I can live with slightly lower down to 850 perhaps, maybe even 845 for that magical 38% overall retracement mark. Anything lower (like 800), and I question if 956 can be taken out again in any final rally this year. In fact the 38% mark would be my "line in the sand" (845)
But even that I will try and not be dogmatic in any approach. The waves will tell the story, at least we hope.