Monday, December 27, 2010

December 27th - Another Descending Broadening Triangle?

The market recovered easily from the early sell off today and the only pattern I see at the moment is another Descending Broadening Triangle. The markings are very similar to the one on 12/14 when I posted the last one so we might see another push perhaps to the 1270-1275 area. It's still too early too tell as the markings are not complete but if the market keeps avoiding key levels and trendlines then it is just correcting in my opinion. On the Elliott Wave labels, I've honestly lost count but every time we get into a triangle this theory points to a Wave 4 with higher highs to come. I think it would be more bearish of the market gapped up and then reversed as opposed to gapping down and reversing up. So I am staying with my short position until the test of the trendline again, if it bounces again then it means this rally is not done yet.

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