S&P- NOW it's a Sell

Equities are getting the looked for bounce after the initial move down off the highs. The low of 1902 was of course, a 50% retrace of the previous 3 month leg up. This sharp correction up of the last several days is, so far, exactly what you would look for in a "2" wave....a sharp "abc" structure that takes back a good deal of the "1" down, with most participants assuming it is a resumption of the up trend.
WSJ 8/14/14 .... " U.S. stocks rose on Thursday, extending the Dow's march back into positive territory for the year."

Daily

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This is potentially an important selling opp, and of course if the top is in, THE important selling opp. But even if there IS more upside to come, there is a high likely hood of at least one more leg down to give an "abc" type structure to what the bulls hope will turn out to be merely a correction down.

The 1953 high today is where the "c" = .618 of the "a". 

Unfortunately the "2" can be strong so a .82 retrace has to be allowed for. 

Of course "3" waves typically are the most significant moves and mark recognition by the market that the trend has changed.

These markets are so very different structurally from 5 yr.s ago when we made the low, that I've wondered whether "Elliott" is still a useful method. It certainly was useful then.