Anything She Wants

Posted this chart on Stocktwits and Twitter yesterday at 2:46 pm.

Ironically, at 2:51 pm all hell broke loose. I take no credit at all for the timing. But I mention it because it illustrates one of my favorite things about Fibonacci, Elliott wave theory, and other forms of market geometry: form follows function, and the "reasons" take care of themselves.

Many attribute yesterday's violent reversal to the latest Ebola scare, this time in NYC. However, it amazes me that the news "broke" just minutes after the trend line shown above was tested. And no one wants to mention the new moon, haha.

Whatever, none of it may matter because 1922.50 held last night in the futures, and I'm kind of glad it did. I still want either a legitimate test of the 50dma at the 1966 area in the cash market today, or a full-on test of the 1970.36 swing point.

If yesterday was the test, there should be no mistaking it today. 1926.83 should be retired with extreme prejudice, but depending on how deep the market retraced, there could be a more complex pattern building.

In fact, in Elliott wave theory, there are thirteen possible corrective patterns. I try to start simple. So it's possible that a decline might only be part of a wave b that could still reach higher before a stronger decline days later.

The point is that either the market has made THE TOP or it hasn't. I'm still in the camp that it hasn't; that it has only made some sort of wave three high, and that we're currently in wave four which could still probe much lower before a final wave five to new all-time highs.

But if I'm wrong, the top chart on this page will be the one to be prepared for. And there is only one way to find out -- but not until Ms. Market sees fit to tell us.

Until then, she can do anything she wants and get away with it.