Bullish Engulfing Pattern

I was expecting a bullish wave yesterday that was going to test the 50 DMA but we got a lot more than that today. The wave from yesterday was a W1 and the 1685 target was reached just on its W3 so I won't be surprised if we see more upside before seeing reversal. And given the strength of this wave and the potential resolution to the stalemate in Washington, odds favor we are seeing a continuation of W3 of LT Int W5. The candlestick pattern was a Bullish Engulfing Pattern which has been very reliable every time we've seen it in the last year and we might see an Inverse Head and Shoulders formation with 1670 as the ideal right shoulder. However, we might just get a very shallow correction to the 50 DMA/TA or even less before a very strong bullish wave that will take out the all time high. If this is the start of a 5 count then expect 1760 more or less, assuming we see a reversal without taking out the 1695 resistance (which makes W1 around 45-50 points).

I ended up selling my short term longs as planned for a decent profit when the 1685 target was met. And I am hoping we will get an IHS set up to buy back at a cheaper price and then enjoy the ride. And obviously should the market be able to reverse all its gains then I will consider a bearish alternative but things are looking up for now and the trends should go back to green as long as the TA and the 50 DMA hold.

Short Term Trend = Neutral Leaning Bullish

Medium Term Trend = Neutral Leaning 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.