Wow, it is not often that we get to see limit down moves in the stock indexes. I thought for sure that I was dead wrong about the large triangle pattern, but today's action puts it back on the table. If fact, it looks a lot more likely now. None of my short positions reached my exit targets this morning so I was a little disappointed. It was clear after the first 30 min that the big move down was going to fizzle as there was just not any real selling pressure. The volume in the Qs at 10:00am showed a very low run rate for the day. I quickly abandoned any thought of a big down day at that point. We may see a little more downside Monday morning, but unless the selloff gets going fairly quickly, I do see the large triangle pattern playing out. This pattern will also give the markets time to catch up to the declining moving averages.
Review your stop levels on short positions this weekend and make sure that you have enough cushion without too much risk to ride out this triangle. There's no point in getting stopped out when another big down move will be coming in November.
I was pleased to see that my large triangle possibility was featured as the top alternate count in Elliott Wave International's Short Term Update. I am sure they did not see my post. I am just saying that it inspires confidence that my analysis is on the right track when the most notable elliott wave service agrees with me.
Unless Monday does start with a strong selloff, it will be a good time to take a break from active trading next week as markets will likely be going nowhere fast. Trading can be very demanding mentally, emotionally and physically so take advantage of these opportunities when they come.