Well I was waiting for a new low to complete a 5 wave down sequence which will help us determine if the downtrend has resumed, and possibly if wave 3 of (3) is underway. I see on the 5 minute charts that a possible ending diagonal is forming and the RSI, stochastics, and MACD are all trailing up while the price of the indices are going down. This bullish divergence shows a snap back rally soon. But with 5 waves down completed, we know that the trend should now be down. The place to put my stop losses will be just above the beginning of that 5 wave rally, which is 11,561 in the Dow, and 1285 in the S&P.
After a rally here to correct the 5 wave drop, we should see more heavy selling to new lows as long as the two area I just mentioned above are not exceeded.
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