
Unless we move back up into it, the target on the latest flag is ugly. It’s worth about 38 handles, so it would target the 800 SPX area, and on the DOW it would target about 7,850. That’s a big if, we’re still oversold and have been oversold on the 60 minute timeframe for the past 4 days without a significant bounce.
All the daily index charts ran into their lower Bollinger bands and are turning them lower. If you’re short and we regain the 840 area, I wouldn’t stick around as I also see what could be a very clean 5 waves down on the RUT. Difficult to trade unless you got short a while ago and held firm.
Since I copied that chart, we’ve bounced back up to taste the flag bottom again… stay sharp and good luck.