Guideposts
Well, I'm in better spirits this morning than yesterday morning. I shorted 40 /ES yesterday evening at about 825, and we're down 21 points from there. Plus, having read the latest Short Term Update from Elliott Wave International, I think there's finally a general direction now that makes sense (chart used with permission):
Their assertion, as you can see, is that we're in the following:
- A drop down to near, but not as far as, the November lows (on the S&P, that would be about another 50 points from here);
- A short-lived rally, not to exceed 858.13;
- A stronger plunge, cutting beneath the November lows
They go on to conjecture that we would finally be in a position for a robust, lengthy rally before the mother-of-all-plunges began.
If this outline is more or less true, this is of tremendous help to a trader like me, and say what you will about Elliott Wave (which I know some folks called the "Idiot Wave"), it has been instrumental in my own trading.
For the moment, I am positioned to take advantage of today's drop, and I've got stops at 812.50 on the /ES to lock in my profits, even if some strength does emerge.
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