Prepare For Downside Test This Week – Update

Written by William Kurtz

For some readers of this article yesterday, the charts did not display properly. That has been corrected in this update.

The Bulls staged a valiant attempt to surpass last Tuesday’s Highs in the Dow Industrials and in the S&P 500, but failed (by a hair); then the market began to fall apart at 3:15 P.M. and collapsed in withering selling in the final six minutes of trading. The Dow Industrials closed the day 30 points higher; the S&P 500 4 points higher.

Please share this article – Go to very top of page, right hand side, for social media buttons.

The NASDAQ Composite closed 5.69 points lower; the NASDAQ 100 closd 11.91 points lower. The Russell 2000 and the S&P 600 SmallCaps closed single digits higher after modest selloffs near their closes (selling in the large-cap issues in the final six minutes of trading was outpacing the selling activity in the smaller issues).

I believe that the “wind-shift” at 3:15 PM yesterday, plus the clear selling trend of the rest of the trading day, plus (especially) the very heavy selling during the final six minutes of trading, all within the context of Elliott waves at multiple degrees of downtrend, foretells a strong move to the downside. I think it is probable that the broad market will soon accelerate downward, and that the Russell 2000 and the S&P MidCaps and SmallCaps will start to play catch-up.