Wednesday, August 21, 2013

Bearish 5 wave count

The market failed to bounce as I was expecting and instead it put in lower lows and lower highs, which implies further lower lows ahead are likely. The choppy bearish micro 5th wave count was valid for what now seems like a bearish W3 and the bounce yesterday looks like it was a W4 counter rally. So I am giving a bearish count to the micro waves that followed the high of the day and we'll find out tomorrow how this wave evolves. If the micro wave count is correct, it implies a target in the 1620-25 area which would complete a bearish 5 wave count from 1709 to possibly form an A leg. Which would make this a W2 correction from the 1709 high and no longer a W4 I had been hoping for.

I closed my Google longs for another nice profit despite a somewhat bearish market and I am hoping the market will drag Google down tomorrow so I can re-enter that position. For now I am all cash on my short term trading account.

Main S&P 500 Trends*

Short Term Trend = Bearish
Medium Term Trend = Bullish
Long Term Trend = Bullish

* Trends are not trade signals. Trends are posted for situational awareness only and does not take into account wave counts, technical or fundamental conditions of the market. While mechanically trading the posted trends is feasible, keep in mind that these are lagging indicators and as such are prone to whipsaws and I personally do not use nor recommend them to initiate or close positions in the market without taking into consideration other factors.

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