Wednesday, May 2, 2012

W2 or W4 Correction

The market continued its correction that started yesterday and we now have what seems to be like a completed A wave and working on the B. There is a head and shoulders that targets 1371. Also, if we assume B topped today and C is 1XA then we get 1380. So there seems to be some more downside ahead that will ideally bottom in the 1371-1380 area. What is not clear not me at this point is whether this is a W2 correction or a W4. The deeper the retrace, the higher the chance this is a W2. So for now I am looking to see how the Trend Avg holds, the current avg is 1391 and rising. If the the market manages to test the TA successfully, we should see 1422 taken out on the next bullish wave.

No trades today as I am waiting for this bearish wave to finish.

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