Finally, after non-stop rally from last Thursday to this morning Thursday, the market is finally taking a slight breather. However, I do expect the market to resume its rally soon, perhaps tomorrow or next Monday.
Yesterday, in my post S&P500 Daily Chart Analysis – Wednesday, 2/17/16: Rally Continues Over 1920ES As Expected, Trade is at Max $ Profit, I said there should be a little bit more room to the upside from around the 1923 region.
Indeed, the high overnight was around 1933.
So that means wave A was a 90 point rally and C was a 63 point rally.
Assuming that was all part of a larger wave A — we should have a wave B retrace towards 1900 — not sure exactly where, but it should be somewhat short since I’m expecting a rally over 1940/1950 after the B-wave retrace.
As our trade of the week has been max profit for most of the day, subscribers had the option of cashing out anytime. Alternatively, I suspect even holding through this retrace may still be ok but always take some profit if we’are at 90% — no point in giving away gains. We may be initiating next week’s trade of the week tomorrow depending how the market goes.
This is what a wave 2 looks like –and it appears as a fractal in different sizes — let’s see if it plays out with a move down below 1910.