From a volume profile standpoint, yesterday built volume in the 1396-1400 area. Incredibly, it looks as though 1428-1431 is open for a retest. But it looks like that may have to wait. Yesterday was an intense selling day: A/Ds collapsed, and volume exploded. Whomever wonders where volume has been since 2009 has only to study the sharp breaks to find it. That is why I sound like a broken record when I say this market is structurally unsound.
Yesterday's decline, even though it found support at a big 38% Fibonacci level (1395.14), means it's time to study this chart again. It's a real possibility. When I wrote that "Something's Up" the other day, yesterday would surely qualify.
However, I continue to think that the market will eventually resolve higher, even from near current levels, but as always am more than happy to be proven wrong.
The latest "official" Elliott Wave count relies on not one, but two truncations within the past year to make its point. Truncations are final waves that fail to reach to new highs and are very rare. In fact, I couldn't point one out on a chart back to the 1920s because I not aware of any. To have two within the past year seems a little suspect to me.
I'm going to stick with what I see, and I see an S&P that has just corrected to a big Fibonacci support level. I see positive divergence on a daily chart, plus the 60' and 30' charts (very rare with the custom indicator I use). I see the 200-day MA close by at 1380 (and everyone talking about it). I also see a VIX that did not make a new high yesterday as the market was making a new low -- more positive divergence.
1412 would look good today if the 1405 level can be exceeded. Below is the 1380 DMA, and a 1:1 Fib extension target at 1373 (that no one is talking about).
I must admit I don't like the way the bounce looked or behaved yesterday, so there could be new lows coming. I bought some SPY 140 calls at 1390, scaled at 1396 and got flat at 1401. It never hit my 1405 target.
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