Wave chart at 10:15 am

Here is the e-mini wave chart for the past two days. We have just seen the longest down wave on this chart. It was accompanied by fairly high volume - not as high as on the supply shock, but higher than on any other portion of the decline from 873. This makes me think that the drop has further to go even though the market has gotten close to my initial 805 target. At the very least I think today's low will be somewhere in the 790-800 range.

Meantime a normal rally now would be shorter than the last up wave which amounted to nearly 17 points. I am guessing that a rally would halt near yesterday's low at 819.50 which would make the rally about 12 points in length. If the market breaks still lower first, I shall still use the 10-12 point yard stick as a guide to the likely size of the next rally.