The Dow and the SP500 declined in 5 waves today indicating that the trend is most probably down. The Qs appear to have traced out a different pattern, but it could be a leading diagonal. Even if the Qs retest yesterday's high, I'm not expecting them to go much beyond it due to the simultaneous reversal that occurred in so many markets today.
Gold, silver, oil, nat gas all declined sharply while the dollar rallied. In my opinion, the rally in these commodities is probably over with gold and silver headed below the April lows at least and possibly the Oct 08 lows.
The outcome in the indexes is open to debate. However, we should see at least a 3 wave correction, and possibly a 5 wave correction followed by new rally highs. It should not go unnoticed that if the selling continues for 2 to 3 more days, the MACD will give a negative divergence sell signal. This is usually significant and more selling should follow if it occurs. However, the post selloff buy signal that follows should be the first valid MACD follow-up buy signal since the rally began in March.
Let's see how this correction develops and look for an optimal re-entry point for the final leg up in this historic rally.
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