Action

Read the notes on the chart.

Jackson

Based on the overnight action, here is my current count:



Do I think the downtrend is over for a few days? Yes, probably.
Am I covering? HELL NO!
Why? See Formations and Real

Uncle Bob

I had discussed the FTSE in a few posts over the last few months: A Trip Around the Globe IV: A Look at a Few International Indices and Bob's Your Uncle

And per yesterday's post, I was showing a lot of topping Formations on the US indices. Well Uncle Bob is not looking so hot either. Here was my last chart of the FTSE (Apr 30):



And here is how it looks today:



.... ouch.

TSX Charts for Kaz

Formations

Nothing ground breaking in the post. Everybody has seen probably a million charts of the potential H&S formations. So why I am showing a few more? Because it helps to tune out the noise. Are we in a Minor 3 down? I don't know, and neither does anybody else. But I think the odds favor it. At least to the point that you must be respectful of the possibility

-- In wave 3s, the corrections within are smaller and subject to severe truncation
-- A wave 2 (which normally retraces 50% - 78.6%) within a wave 3 will be much more of a fakeout and can retrace as little as 23% - 38.2%

So keeping this in mind, and being cognizant of the odds that a Minor 3 here is possible, if not likely, why go to the trouble of timing a Minute degree bounce that has the possibility of being severely truncated? This is not an outright question, and it is barely a rhetorical one. I am not looking for a response. I am simply illustrating why I am not killing myself to count the squiggles in this wave.

Because they are (IMO) not particularly relevant. We have technicals that are breaking down, and we have moves that are accelerating down, and we have breadth that is increasing down. We have death crosses on many indices. We have topping formations that are happening in conjunction with a flattening 200 day MA and a clearly downturning 50 day MA on every single major US index. This is the main reason why I wrote: Real.

If you are a bull or a bear, it would make sense to wait for a clear bottoming move before either covering shorts or going long. This move is building up steam and is not something that makes sense to stand in front of.

Johnny Carson of Japan

Sharp morning down. But the move retraced back up all day, making nearly a long legged doji. Like in my last post, I remain bearish. Is this a short term bottom and the selloff resumes tomorrow: maybe. Is this a longer term bottom and we rally the next week: maybe. I don't know the future, you don't know the future.

But like I said yesterday, I am not trying to get too cute with this wave. I have no desire to micro-manage upside corrective rallies (which are subject to *severe* truncation if we are in fact in a Minor Wave 3 down) and give up my short position in this wave.

As always, not advice. These are volatile times, and you have to do what you think is right. I am just stating my opinion on how I am handling this.