Wednesday Market Action

Yesterday I said: "My best guess is that the decline has resumed, as of this afternoon, and we can expect it to continue in earnest tomorrow."   I don't have a crystal ball and I'm not a genius.  This is just keeping an open mind and reading the waves.  The drop from about 2:15 yesterday afternoon does look like an impulse, so I'll say I got this one right.

While it's possible to read this drop as a complete 5 down into today's close, I don't think the pattern is quite finished.  I think a wave 1 (at some small trend level) ended just before the close yesterday, and wave three may have ended just before the close today.  Going out on a limb, if this is right, there should be a small wave 4 bounce - in the 5 to 10 point range - early tomorrow, followed by another 15 to 20 point (possibly larger) decline.  Then, there should be a correction of the entire drop from yesterday afternoon.  That should lead to a choppy day tomorrow, and possibly an uptick on Friday.  {/limb}

I'll have a graph later in the week with lots of wave labels.

UPDATE: Note that yesterday's open gap has been completely filled in.

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