My count has us currently in (iv) of [c] of Minor 2, the last hurrah for the bulls for a while. Minute [b] was a brief expanded flat (the (a)-(b)-(c) may actually be (w)-(x)-(y) as the third wave is actually the shortest of what I have labeled (c), or we could chalk up the upward tick from 1199 as HFT overshooting).
Timewise, if this count is correct, Minute [a] lasted seven trading days, and Minute [b] three. If [c] = [a] in time, it should also last seven trading days of which five have passed. This would suggest sideways to slightly down motion tomorrow, with one last uptick Wednesday (maybe into Thursday in early trading - a gap down is not the best thing for bears, particularly if it requires a move up to something on the order of 1270-80 to fill).
A down move that is at least a [b] wave should follow. Remember, we have gaps at 1238, 1215, and 1155 to fill. But first we probably have one more push up. Why? For one thing, 30-minute RSI says so - new highs were made on higher RSI. This suggests 1256.55 is a wave 3 of some sort (e.g. (iii) of [c] of 2, which I have). Hourly RSI is lower now than at the top of wave [a].
The market has moved up enough that the 1233.10 wave (i) high is below the .382 retracement of (iii). This retracement now stands at 1233.59-1233.93 and is a logical target for (iv). A lesser .236 retracement would put it at 1242.31-1242.56. If (v) is to equal (i) (41.62 points), from 1233.93 this would place it at 1275.55; from 1242.56 this would be 1284.18. The 200-day SMA is at 1274.61 and will be slightly lower tomorrow; it may stop the rally in its tracks or break, creating a fake buy signal.
As for the VIX action, it looks to me as if it's in the process of completing a bear flag within a larger bull flag. The 50% retracements for the advance from July 7 and May 2 are both in the 26 range, which would be a fake breakout, fooling many bulls.
No comments:
Post a Comment