Good morning. An important day ahead. The broad outlook remains downward, with both the weekly and daily charts putting considerable pressure on the market to fall across May and into June. Futures were -0.5% earlier, but are back to flat/a touch red. Bears will want to see that -0.5% fall attained again by 10am
On the 60min cycle, look back to April 9/10'th. Main' wave'1 (black count) completed Tue' April 10'th at the close of trading. It was a pretty clear 5 waves lower. Now, look at what we've seen in the past 5 trading days. Was yesterday the minor wave'4 ?
If that is the case, then we should expect a fifth wave - that may have started yesterday 3pm. The target would be to take out the 1357 low today. So, that is a 13pts fall today.
However, the daily chart really would suggest a test of the 1340 level. Could we get to 1340 today or early tomorrow? The fifth wave of April 9/10 was around 30pts...so...1369 -30, that would get us to the 1340 level!
So right now, I am looking for a straight down trend day, declining to at least the mid 1350s today. If we look like we are levelling out near the end of the day, I'll close my short position, even though we could briefly drop again early Wednesday to 1340. I'm feeling cautious right now, and want maximum funds for the next wave lower - which could be a monster.
Good wishes for Tuesday trading...updates across the day.