As much as I want the market to crash right now, I think that my wishes will not be granted as fast as I want it to happen. Therefore I'm creating a game plan just in case you weren't able to jump into some shorts and want to do so. Of course this is assuming that the market rallies first thing tomorrow morning. Here is the big picture:
Here is a zoomed in picture:
Let's say that the market already completed a wave 1 because we already printed a 5 wave decline on the hourly chart. Please see previous blog post on this. Since I'm assuming that we are in primary wave 3, I don't think that the counter-trend rallies will have much power. I expect the market to retrace between the fib levels of 38.2% to 50% (1059.35 - 1067.37). If it was me, I will get the initial 50% short position on the 38.2% retracement level while going fully short on the 50% retracement level. I expect this to happen in Nov.4 or Nov. 5. Stops will be placed slightly above the 61.8% retracement level. (1076) I don't think that the 2nd wave should go this far.
So this is the game plan for this week. Of course I wouldn't mind if we head down further. If this happens, all fib levels will change. Good luck!
