Midday Update: 2023-02-24

Bears force Dow futures back to the December low

A normal retrace of the advance from the low yesterday overnight accelerated this morning on the PCE numbers such as to force a new low in the late morning. I had been expecting a retrace in a [B] wave and could still be one as ‘b’ waves can make a new price extreme. We did get a nice bounce out of support from [B] wave supports but will have to see if bulls can hold a higher low this afternoon. The alternative is that the low today is a wave (III) and the bounce a wave (IV) which implies a new low later today for a (V). As I type, the support range for [B] is being retested.

Notice how YM is testing the ledge and started to back off. I’m fearful if they fail to hold here that there will be an acceleration lower.

Peeking into the abys

Taking a peek at the percentage of S&P components under the 20 day moving average, we can see that we are up at the top of the range. It certainly can become pinned up here but prefer a bit of a retrace first.

A bit of retrace before the next push?