The last run down lasted less than 4 days.
The ensuing rally is now in it's 5th day and still unable to break above the Double Top intraday resistance:
<< SnP500 Trade Setup: g10.picoodle.com/ltd/img10/2/7/11/jquint...
>> SnP500 NOW: img15.imagefra.me/i67h/jquint84/141u_399...
Definitely not a bread-and-butter trade setup for EW'ers. More suitable for Scalpers or Intraday Traders.
The Potential Negative Reversal Sell Setup is the flip side of the Positive Reversal Buy Setup I kept illustrating in past trades.
Positives tend to succeed more often during bull runs specially during the last stages as pullbacks/corrections become shallower and shallower - also called complacency or 'irrational exuberance' on at least the short term to medium term basis.
Higher high momentum with price remaining at a lower high is the Negative Reversal Sell Setup. With a Potential Divergence Sell Signal on the works; it is far better to be extra cautious day-trading and or intraday-trading this market.
For me: I decided to reduce my trading activity by buying only YM and forgo the possible NQ trade per last Instablog of July 10. With a lackluster rally; I decided to sell the YM after 240+ points profit/contract which is within my usual 100 to 500 points take home profits (per contract) for daytrades (500 to 2,000 points for Swing Trades).
Wait and Watch is now my short-term mantra.
For those who might want to hold on with their Daytrades an intraday run down below 1958 for SnP500 could spell a break down below the 1952.86 low of July 10, 2014.
Trade with CAUTION.