After a closer look, I do not believe that to be the case. I think we'll head north a bit tomorrow (or maybe just float around flatish for a bit) basically just to burn off some short term oversold condition. Then we will continue to finish our corrective pattern all the way to the bottom of the smaller channel around 1320-1325.
* Note though that Initial claims, Retail sales and PPI are all reported tomorrow morning, so the results of this could trump any analysis here. Bad data could just plunge us straight to the bottom of the channel, good data could cut it out all together.
The small channel in the chart below is inside the larger channel that I posted last night as part of the long term S&P analysis (last night blog only for TF folks). We won't talk about targets for the larger channel unless we break below this small one. Which I don't expect at the moment.
The following chart shows my short term view on a 60 min chart;
I think we could run up as much as 6 or 7 points burning off oversold, then we should continue down to finish this pattern. That should complete this correction around 1325 or a little lower and then we will embark north to finish the rally from March 2009.
The following chart is a daily chart that shows the channel clearer and where our target is;
IF we were to plunge below 1320 (on the cash) and close there, then there are a couple alternate EW counts and views that I have for what may happen. They both involve targets to the downside of at least 1220. But I won't bring those up until/unless we close below this current channel.
GL tomorrow.. be careful with positions ahead of the data tomorrow
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