Market has been testing the 2170 region multiple times. As mentioned earlier, we are beyond the standard 1-2-3-4-5 wave structure — so the tough part is whether there is a fakeout to the upside that resolves down, or whether we extend.
Although spending a lot of time below 2170 could be a bearish signal, on the other hand, one can view that as building a lot of support in this 2168 region, especially if we do get a pop.
The bigger question is if we do get a popup towards 2178 – will it face resistance or will it continue. Since we do have an A-B-C pink structure in place the potential exists for a move up. So at this point, it depends on how we react in that region. If we do turn down, then I would like to see the 2172 region hold as support for the bullish case.
Tomorrow Yellen speaks at around 10am, I believe.
The bearish blue possibility would have us test the 2178 region and fail, turning down. The bullish pink possibility would have this extend beyond the 5th wave high.
Today we had a 5th wave low into 2168 – and then an A-B Mountain towards 2177 and then back down to new lows at 2167 – breaking support temporarily.
Then at the close, it rallied towards 2174.
The russell showed a little more strength after retesting 1232 region at the open. So far it’s following the pink line projection.
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