The futures dropped big Sunday night but rallied back big time to start the US session in positive territory. Then the bears showed up again and pushed the market significantly lower in the morning only to see the bulls come back and push the market into a slightly higher close. It appears that a series of 1 and 2 waves have been unfolding since the top a couple weeks ago. Today's decline looks like a wave 'v', which was just a continuation and extension of the previous downtrend. I originally thought the 5 wave decline was completed Friday and wave (ii) was either done, or would be done soon. Today's 5 wave decline and sharp reversal means I need to alter the count a bit to have today being the end of the 5 wave decline composing wave (i). So now wave (ii) is underway, and it appears higher levels will be achieved tomorrow before wave (iii) of 3 of [3] or C gets underway. The market can turn down at any moment, and at this degree of trend it means it will be almost a straight line down. So I don't want to get too cute here. I simply want to be short now with stops just above 1174. If the market turns higher from here I'd merely look at that as an opportunity to get more short as long as it stays below 1174.
Above is a daily chart in the S&P that is bothering me a bit. It shows several candlesticks that have long wicks on their undersides showing the power of the bulls coming in and preventing the bears from maintaining losses into closes. Now this can be explained with EWP on the intraday charts by the series of one and two waves that unfolded from the top, but without EWP it would appear that strong support is forming around current levels. But a strong close beneath today's low of 1114.96 would be a big sign that EWP is prevailing and that these potential bullish candlesticks really don't have much potential at all.
PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.
No comments:
Post a Comment