Per David Elliott :

Our comments of sellers at yesterday’s highs, was again tested today, and found more sellers, enough to give the DJ-30 a market swing of 176 points from a new DJ high to the low.

This market swing created another Key Reversal signal on the Daily, and a Bear Engulfing pattern on the 2 day charts for the DJ-30 and SP-500.
The QQQQ managed a new HOD, but did not take out yesterday’s lows.

For the DJ-30 we now have a clear target on 9811 on the daily charts for this week.
A break of that level sends us back to the daily 50SMA at the 9634 level.
On the similar market pattern on 9/23 we saw a 9 day drop to the 50SMA with good buy signals for the last new highs bounce in the Indexes.

Our 2 day charts continue to show negative divergences with the old highs of the past two months. This would suggest we have a good potential to possible break the daily 50 SMA when tested, if tested.
On our technical studies we have a SOAP sell on the 2 day charts with today’s market action for the DJ-30, SP-500, and QQQQ.

Additionally, we had a major double top failure today in the Transportation Index, the DJ-20.
And a bear Engulfing candle pattern, with a Key Reversal thrown in as icing on the Bear cake.

The Key Reversal on 8/28 confirmed the DJ-30 sell off and got the market dip move to the Daily 50 SMA for both the DJ-30 and DJ-20.
Patterns repeat . High probability trades but, nothing 100%.
This presents a low risk trade, when used with correct stops.

I would expect some market bounce on any gap down on the open Thursday, similar to past bull market dips. This would be followed by more selling in the following days.

Tech Talk:
IHF, ICE HOLE FAILURE is when a price moves down below the 50SMA , bounces back up to retest the 50 SMA, then fails the 50 SMA, and goes down to make new lows for the move. Examples : WEN, JACK

Specific stock moves:

HD is moving towards last lows.

LOWS following HD.

CSCO target $23.59

AMZN, if $92.85 breaks we may see the $88 level.

CHINA, broke out on the daily and hourly to the upside.

GOOG and YAHOO, new market highs with closes on lows with market sell off. Some gaps to fill now.

MSFT, I still like the upside to MSFT, with the new product launch.

MVIS, I am still hearing positive comments from the company. My long term hold with a 450% gain at these levels from our buy call last spring.

CPST, second failure up at these levels c will bail out on any more down move to lock in profits.

US$ next upside target, 75.66, currently at 75.38 in post Wednesday nite markets.
Four Hour charts are giving a buy signal with today’s up move.

Metals. GOLD, SILVER, COPPER, ALUMINUM, all holding up, not believing in any US$ bounce at this time. Rightly so .
GOLD likely to test $1036 again on any break of Wednesday’s lows.

BANKS: banks have shown negative divergence on this last market run-up. Reality time.
WFC target $28.19 on this dip.
BAC, broke the 50 SMA, target now $15.37.
GS, next target $175+ target.
JPM, next target $43.84 target.
ZION, next target $16.00

OIL new Year High. Markets closed before the Stock market sell off.
I suspect some selling/ profit taking by those wanting to lock in some bull market profits Thursday.
Especially if the US$ can climb to our next resistance levels.
Look for Oil to test $79.62 Thursday.