Shorter-term trading aside, today is a quick reminder of where the market is in the big picture. DJI Last Friday was a teaser of what is coming in the weeks and months ahead and this chart above lays that out as well as any words I can use to describe current conditions. The March 2020 Covid Crash lows is a natural target for the next leg down. Keep that in mind as we must deal with these periodic melt-ups, otherwise known as Fib retracements. I sent out retracement maps on the Weekend Update on Sunday and the indices have run right up into their respective retracement zones. Stand by for reversals. SPX - Retracement Zone Five waves down and now an ABC into the 38-62% Fibonacci Retracement Zone, then another hard leg down. At the end of last week we saw VIX spike 33% in less than two trading sessions and its short-term calls were up 10X for the week. More of the same on the next leg down. Today's message: Payoff coming, after retracement plays out. TSLA The minimum retracement is in, but the pattern doesn't look right for entry and there are no technical Buy Signals (yet) to trigger entries. Sideways to down is the most likely scenario over the next few days to weeks. When and if that turns bullish price will let us know.
