Well, I give the bulls credit for at least halting the bears momentum, however that was a pathetic counter offensive launched today and all they really managed to do was give the bears time to catch up their supply lines (work off oversold).
I'll admit to being as unsure as the next guy as to the EW count. I do think I have the important trenchlines roughly outlined and the bears are still in firm control. I am going to look to lighten up and take troops home or hedge slightly long around 800 where I indicated the bulls might try to mount a last ditch defense if we get more sell off. At some point the bulls are going to mount a serious offensive challenging the entire move that started yesterday. Always best to be cautious and book little gains during each step along the way. You can always redeploy the troops later. Right now the new yellow down channel I have as the 3 of 5 of C is my new major guide post. As long as the bears maintain that momentum I feel comfortable having my troops on their side.
On the daily chart I'm going to go ahead and make my first prediction. We have another St. Patricks day bottom exactly one year to the day after the BSC bottom on March 17 around 675. There's still a lot of fighting to do between now and then, but that's where the important trenchlines are pointing right now.
So find me an evening star (the 3 candle pattern of the previous three days; big green, indecision, bigger red –) that isn't followed by a spinner and then continuation. Even the XLF morning start formation off the July low had a spinner the next day and then continuation. I've found 20 plus of these scanning a bunch of charts and they all have spinners and continuation or in the rare case immediate continuation with no pause. I can't really find examples of this pattern failing just surfing charts.
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