Wave [c] of 2 is three points shorter than Wave [a] at 30.20 points. However, it has stopped short of 2273.82 and appears to be complete. If so, the decline begins in earnest. Short positions may be taken beneath Short-term support at 2260.63. A second break of the trendline at 2250.00 is also a good short entry.

VIX may also have completed an 81% retracement and may be heading higher again. The first resistance is at 12.63. One may begin a position above that level and add to the position above the 50-day Moving Average at 13.98.

The fly in the ointment is the Hi-Lo Index, which broke above its prior high at 274.00.

ZeroHedge comments, “Despite a more hawkish-than-expected Fed minutes, investors appeared to be reducing exposure to the USD (modestly as EURUSD briefly tagged above 1.05 and buying bonds across the curve (with the belly outperforming) to start. However, that quickly reversed and left stocks mixed with banks just green post-Minutes, and the USD limping higher.

The initial reaction to the hawkish Fed minutes was the ubiquitous VIX slam which sparked algo buying panic running stops above the opening Dow highs...”

However, the DJIA failed to make a new high…

Regards,

Tony

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Anthony M. Cherniawski, President and CIO http://www.thepracticalinvestor.com

As a State Registered Investment Advisor, The Practical Investor (TPI) manages private client investment portfolios using a proprietary investment strategy created by Chief Investment Officer Tony Cherniawski. Throughout 2000-01, when many investors felt the pain of double digit market losses, TPI successfully navigated the choppy investment waters, creating a profit for our private investment clients. With a focus on preserving assets and capitalizing on opportunities, TPI clients benefited greatly from the TPI strategies, allowing them to stay on track with their life goals.

Disclaimer: The content in this article is written for educational and informational purposes only. There is no offer or recommendation to buy or sell any security and no information contained here should be interpreted or construed as investment advice. Do you own due diligence as the information in this article is the opinion of Anthony M. Cherniawski and subject to change without notice.

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