Thursday, December 5, 2013

Short Term Trend is confirmed bearish

The market retraced a good portion of the bounce yesterday and one could make an argument for the Inverse Head and Shoulders I mentioned yesterday as a possibility. However, I am labeling the retrace today a B Zig Zag with a bullish wave to come as soon as tomorrow to challenge the 1800 level/Trend Avg. If we add the length of A to the low today, we get that challenge to 1800 (1803 to be precise). Alternatively, the market could be triangulating in another bearish W4, which would imply one more lower low before making a bounce to challenge the TA. I was very tempted to sell my longs but I am holding until we get a TA test. Last but not least, the Short Term trend has turned red so it's time for bears to make their case. We haven't had a bearish ST signal since September and this proves again that wave counts can actually predict correction. I am adding again the LT chart I posted in May when I was then calling for a top at 1650.. the odds of this being a W4 to fit the chart are astronomical if these were random guesses.

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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