Well, not really, but the sudden drop in the futures this morning is unnerving to say the least. Many elliotticians are calling this a 3rd of 3rd wave down, and perhaps in retrospect I will agree with them, but the fact is that we are still above the 5/6 lows. It would take a drop of 4.3% in the Wilshire 5000 from here to take us below that level. It would take a drop of 7.5% to take us below the 2/5 low, which is the true level from which we would say there has been a major swing change and an invalidation of my wave count.
To me, the current decline appears as a 2nd wave retracement of the rally off of the 5/6 low, and as long as markets remain above that level, that seems to be the logical stance to take regardless of the fact that the Dow could fall another 575 points before violating the low. Also note, the SP500 would have to break 1044 to make a 3 month low.
According to the work of Robert Prechter, 2nd waves tend to push sentiment to a greater extreme than was seen at the origin of its preceding 1st wave. Isn't that what we are experiencing now? Fear is greater today that it was on 5/6.
What if I am truly out to lunch with this view, what then? Even after the markets had broken down on 9/5/08 to the lower daily Bollinger band, there were 3 rallies to the 20dma. There will be a sharp rally back to the mean at some point. If my current views are off, as seen by a break of the 5/6 lows I will dump my long positions on such a rally and add short positions. As bad as it looks right now though, I don't think I wrong yet. If that day, or moment comes, I'll let you know as soon as possible because while some part of my ego would love to be right, I am more concerned about making money than being right.