Wednesday, August 12, 2020

SPX and INDU: Still Work to Do

Last update noted that SPX could be close to completing a fifth wave, which could lead to a correction, and yesterday we did finally see a bit of a correction.  The question now is whether that's just a near-term correction, and today we'll look at two charts that argue it just might be.

These charts are what led me to warn just after the close yesterday (in the forum) that Tuesday's low ("minus a hair") was an inflection point.  First up is INDU, because INDU is a fairly clear "three down":

Next is SPX, which has yet again formed a "less than clean" top, which sometimes indicates a b-wave high:

In conclusion, while yesterday was finally a somewhat exciting session for bears, they do still have work to do to turn it into something more than "just a short-term correction."  Yesterday's low is (as noted yesterday) an inflection point, which means bulls could turn from there and rally it back up to a retest/best of yesterday's highs.  Trade safe.

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