Upside -- 1181, 1207, 1234
Downside -- 1153, 1136, 1115, 1102
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Yesterdays theory that it was significant that we held the lows is so far turning out to be a good move. The question now is how large this bounce becomes.
From an Elliot Wave theory standpoint, this could be a larger degree Wave 4 up or a small degree wave 4 up that is still part of a larger degree wave 3 down.
Essentially what that means is that we could reverse here and have another plunge lower, to new lows, before finishing this wave of selling and then have our significant bounce or we are going to have a significant bounce right now.
However, keep in mind, there is still a large degree wave 5 down left either way.
I don't generally bring up wave theory, but in this case it has something to tell us.. and that is this round of major selling is not over.. but we may have a significant bounce here before it finishes up for more than a week.
SPX Daily;
You can see here we've closed well back into the bollinger bands for the first time since the sell off started. Anyone who's followed me for awhile knows how much "stock" i put into that. It's significant and is strong evidence to me that we're going to have a pretty hefty bounce and not turn straight back down to new lows. I want to note though that we may pullback some of todays gains before moving on to higher prices.
1207-1234 is a likely area for this move, but we could go as high as 1280.
SPX hourly (10 week)
Here's all of our potential channel lines. I like 1234 as a target area for this bounce. It would also blend well with Elliot Wave as a wave 4 of this move from the top cannot exceed 1240 without violating rules. So that would test right up near that level, which would be fairly typical of market action.
The only thing that concerns me about this bounce continuing higher is if this wave 3 down we are in is not over and we are about to finish it. But I have scratched that idea because of us getting so far back into the bollingers, but I will be watching to make sure we stay in them. If we fall back out of them tomorrow, its game off for the bigger bounce.
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Keep in mind, this is all part of a 5 wave structure that makes up WAVE 1.. the first wave of this very large Supercycle sized decline we are beginning. The WAVE 2 supercycle degree corrective may happen in the fall through Christmas and make us feel like the worst is over and the crisis is all done and over.
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Football starts tonight!! YES!!!!!
I'm a Redskins fan!!.. SHIT!!!!
GL
CJ
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