Surprises will be to the Downside

With the larger trend firmly down at this point, it's key to remember that surprises will be to the downside. My prior post merely points to the direction that seems most probable with the evidence at hand. However the market rarely moves perfectly to plan, and gives us surprises constantly. When the larger trend is so strongly down at this point, those surprises will be on downside movement. So in case I'm wrong about my short term bullish outlook, we need to watch for the market to break down lower in the next wave of heavy selling.

Above are charts of the Russell 2000 and the S&P 500 cash at the 15min intervals. The way the structure is unfolding now, it would be real hard to keep a bullish case at the forefront if the wave b lows were broken. So I drew lines of support for the short term bullish case at the wave b lows which are at 563 in the Russell and 1045 in the S&P. Any solid break of these lines should inidicate the next wave of selling is underway. Most likely, the Russell be the first to break this line and lead the way as it has been doing the past couple weeks.

So to sum up, I'm long term firmly bearish below the S&P 1101, but am short term bullish until S&P 1045 AND Russell 563 are broken.