Pullback

There was a nice blow-off top yesterday morning followed by a hard selloff. So far this is all in line with what I was looking for in my last market update. I don’t have a ton of confidence in the short-term wave count, but my baseline expectation remains for this to be a reasonably quick pullback, followed by another wave to test the highs. It has bounced pretty far off this morning’s lows (S&P low was 1635, now 1653) and it’s possible that will be the extent of the downside, but I’m hoping for another push lower (to form an ABC correction pattern and to reach at least the 38% fib retracement of the prior move). It would be prettiest if it bottomed somewhere in the 1593-1630 area, and my guess would be for the higher end of that range. S&P 1625 and Dow 15097 look best to me, but I’ll try to wait for other signals before jumping in.

AAPL has been holding up well. The exit plan of half off in the 440s and let the other half ride still looks solid.