11/16 Daily Commentary

11/5 was the top day for this decline.  Odds favor this as a wave 4 within a larger abc up.  Wave 4 should not be deeper than the wave 2 zigzag in August, which was about 775 points.  Therefore this decline should be limited to 10,665 and should be a triangle or rectangle.  Currently the market has completed wave 1 of the 3rd wave down which should complete Thursday.  Assuming wave 2 will not be a rectangle then it should retrace 38.1% of the decline from Friday since Friday was larger degree wave 2 top.  This measures to 11,100 which is within the 4th wave of lesser degree.  The SPX measures up to 1187.50.

In order for the market to be in Minor wave 4 up is for the decline to be a 3 wave and end before 10,665. With I1 due to bottom Thursday this bottom should not be the end of the decline, hence I have marked today's low as Minuette1 of Minute3.  Minuettes 2,3,4,5 should develop by the end of Thursday.
If the market instead extends today's rectangle into tomorrow (that is, does not rally tonight) then this will increase the odds that it is wave 4 of a 5 wave down.  If this decline develops into a 5 down then the higher level count would need to be revisited and perhaps revised.
I plan on shorting DJ futures at 11,082.
The Euro declined in what I believe to be a completed 5th wave down.  It should retrace back to 136.20.  The prospect of this recovery in Euro is what caused me to exit dollar long and increased the odds for a stock retracement upward.