2089-2091 was resistance – as noted all along. However, the resistance did break towards 2094. This was a fakeout breakout that I have to watch out for. After a Fed announcement on April 27, it broke out over support and looked like it was going to new highs. Should have realized this is the definition of a b-wave — when you get that feeling it’s going to make new highs–that includes even when resistance that has been tested multiple times breaks to the upside. At midnight, the Bank of Japan gave a surprise announcement and the market plummeted. The next day it rallied right back to 2093. Once it started drifting, I got stopped out at 2086 for few point loss–not too bad. That was shortly after Carl Icahn said that he was totally out of AAPL, which made the Nasdaq, in particular drop heavily.
I was expecting a drop all along since April 21 — but I kept expecting the 2090 resistance to hold and for us to drop below it — but then it just kept hitting its head against 2090 and then even broke through it. I fell for the trap as I thought that once it broke the 2091 region which it hit its head against so many times, that the market – for whatever reason, just won’t go down.
It wasn’t until the Bank of Japan announcement combined with Carl Icahn’s statement on April 28 – that the market finally dropped.
The fact that it started forming a wave 2 triangle with lower highs overnight into Friday morning – was not a good sign for the market. Once it broke 2065/67, then 2067 served as resistance — and then that’s when it finally dropped.
However, the last hour rallied from 2046 to 2060. Either, this is a very bullish market, and that’s all we’re going to get or we hit resistance in the 2065-2067 region and head back down to finally get towards 2040/2035.
On an intraday basis, during the drop, the wave 4 bounces were very high. The S&P and Russell did make new 5th wave lows at 2:15pm. However, the Nasdaq did not — the Nasdaq had a truncated 5th wave – indicating the multi day drop in the Nasdsaq might be over. If the Nasdaq is finished dropping, it seems less likely that the S&P and Russell would continue to drop — since those two markets have been stronger.