It sure does look like one and especially considering that the break of the trendline was down downward on very heavy volume and the retracement back into the underside pocket of the trendline was on significantly lighter volume.
My gut feeling tells me that it is valid and that we turn down tomorrow and into Friday. But today was an inconclusive day, an inside day.
If we bust higher in a big way on any of the last two days of this week it is going to put in some serious doubt any severe bearishness I have been thinking was going to happen. So for now just wait and watch and look for confirmation tomorrow or Friday.
On the monthly chart you can clearly see that the typical retracement topside into the January monthly candle has occurred and only in 2 to 3 days! If we turn down again and then lower into next week it should do a nice job of filling out the February candle and create the long awaited follow through monthly bar I have been hoping for.
But this scenario can be blown away in a couple days. The market right now is at a teasing point and I really need to see weakness tomorrow and or Friday to get a good boost of confidence that leg 2 down has commenced.
The UUP (US Dollar Index ETF) still looks strong and based on my amateur elliottwave skills looks like it could be warming up for a 3 of 3 wave up ? Which are usually the most powerful waves. I realize the market has been lagging in its inverse behavior with the UUP in recent month, but still a spiking dollar higher could be the added juice we need to get this market rolling over again.
So we have the dollar, the weekly trend change down, the bear volume to bull volume ratio and this bear kiss chart on our side. That is the evidence… So having said that, with all this evidence, will the market be able to ONCE AGAIN evade all the bearish signs and blow away the bears with a 200 to 300 point up day? I never want to say never in this business, but my odds now favor downside resumption into end of week.
Lets see how it shakes out !!!