Well, after yesterday's relief rally in the afternoon, Mr Market still aint happy and we are back in the warning zone.
My thinking is that we may need to expect some severe chop around here, as we are breaking through an important line. The bulls will defend this for a bit, maybe try to ride it back up and kiss goodbye later.
From referring back to the T structure, this period relates to August 23-25 and this is when the previous Bull move started to break down, had a few attempts to continue and then failed. Its uncanny that we are seeing potential failure of the rising Gann line at the same point left and right of the T, and is suggesting to me that the real power of the Trump T Structure is now over.
I was looking for a fuller explanation for the current weakness and have found that the 'mega T structure' from early 2016 (the big double bottom) is probably still having an effect as you can see that long range waves from the March and February 2015 period end at approximately mid December and early January.
As we are breaking through an important rising Gann line and potentially at a Sell Signal level this would give credence to an earlier sell signal than previously expected, but unfortunately it would also explain another lengthy choppy and frustrating period with multiple false signals similar to July and August.
Expect increased volatility that is not currently priced into the market, and with the low vix and cheap options that may be the best advice for now.
Be prepared for whatever comes next.
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