There's was no surprise rally, but instead a big decline. 2 things should be kept in mind, the break of the rising trendline is very bearish and the top at 1.4939 was a big top which will probably hold for a very very long time. Now let's have a look at the daily chart. Here we see that from the 1.4939 top price has declined in a corrective way. Today price has touched the level where there are now 2 equal legs from the top. The problem here is that the 2nd leg down is a complex triple three. In this case a rally is still looming which could retest the broken trendline.
If we count the second leg as a more common complex double three, the problem is that the rally following the bottom is very small, this is possible if the market decides to be extremly bearish, a bit like the 2008 decline.
Todays candle might also give some indication, a possible hammer could indicate a bottom. The question will then be how big the rally will be. I'm not looking to buy into a possilbe rally, but should price decide to rally anyway i will be ready to short at higher levels, especially if this rally reaches the trendline.
JD
ReplyDeleteI'm having trouble "seeing" the last counts. I see five waves down red x to red y. (Impulsive 1A or C)
On your bracketed orange counts you count (Y)(1.49 top) And then you show a (W) without an (X) between?
Overall I see the same ;) just different lol
GLT my friend enjoy your blog
Jeff
Hi Jeff,
ReplyDeleteHave you tried clicking on the charts? It enlarges the pictures. I understand that you count 5 waves down, but i'm counting the decline from 1.4548 as a complex triple three (wxyxz), which are 5 waves aswell. But like i said in this post, there are other ways to count this.
The (Y) you see at the 1.49 top is part of a WXY corrective wave which started at 1.1875 and is an X wave on itself. The following (W) is part of a new bigger wave Y. An (X) wave is not between a start of a wave and wave (W), but behind it. But again on one of the charts it's hard to see because of the possibility of a very small wave (X).
Hope this helps.
Friendly greetings,
Jeremy