After the drop this morning, the majority of the day was spent tracing out an inverted head and shoulders pattern. If this was wave 1 down, then the wave 2 retrace(62%) should take us to about 111.36. Now take a look at the inverted HS pattern. It has a target of 111.38.
The above chart shows the 61.8% retrace level at 111.36 and illustrates a possible wave 1 and 2 count.
The VIX has room to move down, while it moved up to the upper trendline today, it did not pierce it.In conclusion, I am looking for a bounce up tomorrow followed by the start of a wave 3 of 3 down. But thats just one interpretation. Kenny has this down day has a wave 2 or 4 down. Followed by a wave 3 up. This has me rather torn as I know the period around Christmas is usually bullish and choppy as trading will be light.
