The indexes have managed to stay above last Thursday's low, but the depth of the retracement calls into question the chances of a wave c thrust to above the 11/4 highs. Unless we get a powerful rally tomorrow, it appears that we are due for wave iv of an ending diagonal triangle that should peak around the 20ema by the end of the week. Thereafter, we should see one more new low to complete the decline. Even so, many stocks are showing signs of weakening downside momentum and the reward for shorting is probably too small to take any chances there. I continue to exit individual short positions on new lows.
Wave v of 5 down will probably last no more than 3 days. Swing index shorts may be a possibility, but don't overstay your welcome. The target should only be slightly below last Thursday's low.
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