Well this sucks, ACN and ALB both fooled me and surged higher, making my put spreads worthless and expiration. Although this is rare, and part of the trading game, it is still unpleasant.
Above is my original setup and analysis. I projected a Minor wave C of Intermediate (2) to unfold, which would be a sharp decline. It also fit well into the wave 2 characteristics of a sharp and deep correction...
Instead, the stock rose to a new high in what looks like a B wave within a "flat correction". This is odd for a wave 2 since a flat correction is considered a sideways correction, like a triangle, so they are often in 4th waves, not 2nd waves. Regardless, as always, the market was right and I was wrong. I won't trade this setup again, but the sell signal is still in a confirmed status, and even more overbought than before. I think wave C will bring the price down to just below wave A and to Fibonacci support around $110.60.
ALB was in a similar situation only I had it in a 4th wave correction, not a 2nd wave. I was anticipating a sharp ((c)) wave down to profit on. I didn't get it.
Instead, it appears the stock formed a triangle correction, which is typical for 4th waves. However, the severe overbought indicators and confirmed sell signal I received is not typical to precede a 4th wave triangle, so that's where I got fooled.
This stock is also even more overbought than before so it's a good trade, but I won't be taking it. One punishment is enough. It appears wave 5 is complete, and a large correction down should occur, taking price to the apex of the triangle and Fibonacci support in the $64-$68 area.
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PLEASE NOTE: THIS IS AN ELLIOTT WAVE BLOG EXPRESSING AN OPINION AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. TRADE AT YOUR OWN RISK.
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