Commentary and chart analysis featuring Elliott Wave Theory, classic TA, and frequent doses of sarcasm.
Work published on Yahoo Finance, Nasdaq.com, Investing.com, RealClearMarkets, Minyanville, et al
Join the ongoing discussion with our friendly, knowledgeable, and collegial forum community here!
Amazon
Monday, October 15, 2018
SPX and INDU Updates: Inflection Point
While studying charts this weekend, I discovered a very interesting support confluence, which INDU tagged perfectly on last week's decline. Coupled with the price action on Friday, this tells us that bears probably want to be cautious here -- because all that means this is an inflection point where the market could reverse higher.
Long-term, this is something of a no-man's land... if the larger wave c of B ended, then we'd ultimately expect the 2018 lows broken -- but that doesn't mean the market can't bounce around for several weeks first. Especially if last week's decline had an extended fifth wave (which I believe it did) and extended fifths are notorious for being followed by complex corrections.
Near-term, if this is part of a larger expanded flat C wave down, then wave (1) of C may have completed last week. I've also added a bull count that we can't rule out (an ending diagonal for c of the larger B):
In conclusion, unless and until INDU/SPX can sustain breakdowns of their noted support zones, I think bears want to tread carefully. If wave (1) down has completed, then a vicious 2nd wave bounce may be forthcoming. Of course, if SPX instead sustains a breakdown, we'd have to presume the current wave is still unfolding. Fortunately, we do seem to have a relatively clear dividing line to work with. Trade safe.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment