The S&P is moving just as expected. It was repelled by the 800 level and had no follow-through after the Fed announcement on Wed. Some type of top is in the market in the short term. Momentum indicators are showing major bearish divergence on the 1hr-4hr charts so this decline could be significant. I'm not certain it will take the market to a new 2009 low because the rally above 800 should be a wave 4 but it violated the previous wave 1 so it can't be. It's possible this final wave down is much larger than I previously thought and we're undergoing a very large wave 3 down right now, but I'll let the market prove that to me first and not assume it. Right now I'm a short term player only, because that's what's clear to me. The market has rallied too high and too quick and momentum indicators suggest a large pullback is in its early stages.
I'm short the S&P and Nasdaq 100 through ETF options and will stop out with a strong break above 800 in the S&P. I'm also short the gold ETF.
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