Timely news triggers the TA break

Protecting short profits and some expansion on lower levels.

See first:

Stops to 4565 - 4575 now on running shorts. We should be in a lower lows/lower highs trend now if the original forecast is correct. Stop adjusted to get out if that fails.

Markets dump hard on news of rating downgrade. Obviously this was not part of the analysis, but my thesis is charts forecast moves better than news forecasts charts.

Nothing we’ve seen over the last 7 months or so should surprise you if you read the Feb?March work. This is, literally, the most typical moves off an index low.

In the above the 2008 low and recovery is covered. In 2011 the market dumped on the same news of a credit downgrade. Here’s what happened.

Traded 78 fib to 50 fib. Then the classic 86 pullback and new high I’ve discussed recently.

So the news changes nothing. We’re still looking at the next fib levels down for decision levels.

Original plan unchanged - but if we break supports we’ll look for the continuation move to the following fibs.

Protect short profits now. Stay short until the lower highs/lows break and when we get to big levels we’ll issue more updates for possible long entries and failure points of the bull move.