We continued to sell off very hard. The bearish alternate count was that we were supposed to get a decent sell off, and we sure did get one. Internals were at an extreme 172:1 at the open, hung around 80:1 to 100:1 for most of the day, and closed around 80:1. This is very impulsive.
The best way I see it, is that we are in the heart of a wave 3. The current wave count is that we are in a wave [3] of iii of (iii) - the heart and center of this current wave, which is minute wave [i] of minor wave 3.
If this count is correct, we should continue to sell off tomorrow, perhaps taking out the lows at 1065 and going lower. After that, we could chop a little higher. Remember, we are in an impulse down. The waves down will be much more clearer to spot. 5 down - 3 up.
Aside from the wave theory, today's market internals action tell me that we could bounce very sharply just to wipe out some bearishness before falling again. Just like the crash a few weeks ago, a lot of shares were sold and/or shorted. So just because of the breadth action, we could get a short squeeze soon. So beware of that.
Key pivots to the upside are 1080, 1095 and 1100 to the upside, and 1065 and 1050 to the downside.
Even from the daily charts, we are clearly in a downtrend.
The key trendline currently lies at 1065. So this is a huge number going into tomorrow. Selling could accelerate even more if we break 1065. Or we get a sharp bounce if it holds.
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