Stay vigilant according to Dow Industrials' relative weakness and Elliott Wave counts

Although there may be reasons to look for higher levels tomorrow and/or Friday based on cycles and seeing the Nasdaq relative strength, the relative weakness of the Dow Industrials plus the probable Elliott Wave count signal traders to remain vigilant for the downside. If we are facing a third wave down as the next move, as we are thinking is the right count, then the odds of a gap down tomorrow morning are greater now. The P&F (Stockcharts.com's default settings) show Dow 8000 and SPX 850 as targets. Both look just slightly under the levels that would be symmetry targets if this would instead count out as an "abc" pullback. But those levels would also remain above the P&F chart support levels. If and when we get there, we'll be considering whether those are completing the pullback move, or merely a third wave, etc., with implications for a deeper test of the March lows.

Besides, there's the Bradley model that suggests an important low on Friday. The Bradley model may be working well this summer.

As the dollar strengthened this afternoon while the euro weakened, this can also be consistent with a near-term bearish outlook for equities.
Today the Fibonacci levels worked well - the calculations I'd provided were from the Friday afternoon swing high rather than intraday high, but as conservative levels worked out well for intraday longs with the map into the morning high in SPX. Others had also been mentioning the 912 level based on chart resistance, moving-average or other technical analysis methods. This also looks consistent with being small first and second waves within wave 3 down based on Tony Caldaro's SPC count, which looks good to me. It's because of this count that prospects for a gap down in the morning are increased. Gaps are most likely to occur during third waves (and C waves, which have much in common with third waves).

In sectors, retail and real estate still look heavy, and biotech still is maintaining above its 20-day moving average. Swimming against the tide is difficult but I like the biotechs' relative strength.