Yesterday the long-awaited 1622.56 was tested: the S&P hit 1622.72, mere ticks away.
From there it took off to the upside where it will likely do two things today: test the lower rail of the former triangle at approximately 1643, and possibly test the descending trend line from the 1687.18 high which is currently in the 1649s.
I did not see the sort of behavior yesterday which was supportive of the crash scenario suggested by the "official" Elliott wave count. Up volume exceeded down volume by 42%. A/Ds, while negative, showed positive divergence (more advancers/fewer decliners) as price made new lows. I did not even like the look of the sub waves of the decline.
Unfortunately, the nice clean bull/bear line has risen from 1647.62 to 1661.91 due to market action, but sustained trade above the descending trend line (~ 1650) would be an early warning that the 1622.72 lows may hold.
My gut is telling me that the bull and bear match is not over, meaning that while it is starting to appear that the market is in yet another correction rather than a trend change, there may still be lower lows to come. A more complex, deeper correction could possibly be in store.
The reason I say this is because the rally thus far off the 1622.72 low is not all that great looking, and it certainly didn't lift off with the sort of force one would expect if it was indeed a lasting low.
The caveat to this is that there have been many rallies since 2010 have acted the same way. So I do not over-commit to either side until the odds are stacked in my favor. It's a game of patience.
I've been no fan of this market for a few years now. But it's caused me to dig deep and focus on my core strengths: patience and sustained effort over time.
What was once my bread and butter -- position trading -- has now taken a back seat to hedging, which has become my new bread and butter. So I've honed an additional skill that I previously used only occasionally by doing it over and over until it has become second nature.
One of my favorite quotes by trading psychologist Brett Steenbarger echoes this. "The best traders, I find, are those who have made self-improvement a way of life."
I'm thankful that this "way of life" became second nature to me during my advertising years. Self-improvement was a way of life because it was a way of survival. Trading is very similar to the high-stress, high-reward, intensely competitive lifestyle of the ad business. I'm ever grateful for the experience.