Friday, November 4, 2016

SPX and RUT: RUT Captures First Downside Target

Since last update, RUT captured its first downside target, good for 30 points of profit.  Accordingly, I've added some additional info to this chart:

In the last two updates, I mentioned that unless there was a bullish whipsaw of the breakdown at 2114, then bears should probably treat this decline as the bear nest of 1's and 2's unless/until proven otherwise.  Nothing has changed in that regard.  Patterns like this are never guaranteed, but if we don't play them for their "most apparent" potential, then we will miss a lot of moves. 

SPX is now flirting with a breakdown at the red trend channel.  It closed marginally below that channel, but important breakdowns are often followed by choppy whipsaw action, to shake and punish newcomers who sold the breakdown -- so we may or may not see that type of reaction here.  I can't really predict that, given what's visible in the charts presently, but it's always a possibility to be aware of at times such as this.

In conclusion, presuming this breakdown sticks and doesn't whipsaw directly, then the most probable targets for SPX appear to be sub-1940, in line with the intermediate count I've been publishing for the past few weeks.  Trade safe.

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