Today's price action should leave no doubt in anyone's mind that the bullish trend is broken, technically speaking it broke last Thursday per my trend change post and now the question in everyone's mind is where is this going to bottom. Per my count, which I've had since I had the 1420 target we're in a C leg of an expanded flat. This C leg stopped today at the 1378 level (a level I've mentioned before) and just short of 1.618 of the A leg. However, in looking at the waves I can see more downside so we'll see if this will materialize in the cash market. The ideal bottom for this leg would be 1366 but it could well stop at the 50 day MA at 1371 and from there we'll see the "X" leg before another 5 waves down. Technically speaking we are in a W4 correction at this point and I am not expecting a strong sell off. However, I would assume the market will zig zag ideally to the area around 1297 and start a bullish 5th that should take the market to 1500+.
So for tomorrow, if we get a gap down or bearish action in the morning it will be most likely reversed. Personally I'd like to see a gap down and take profit/long the market. One of the indicators I follow calls for loading on longs now but especially if we get lower prices tomorrow. I entered the weekend hedged and I am position trading my hedge, doesn't look very good on paper but it should work out in the end.
TRENDING WAVES PORTFOLIO
No comments:
Post a Comment