The follow through selling today has shown the near term bullish case to be wrong, or at the very least highly questionable. We've now retraced around 75% of the rally from 6/8 through this Monday, really pretty deep for a correction to that rally. Further, the move today now gives the pattern down from Monday's highs a distinct 5 wave look, although some of the labeling is a bit awkward. The message with this count is that the direction of the market is down in the near future, as a 5 wave pattern occurs in the direction of the underlying trend. However, we should see a partial retrace of the selloff starting quite soon. So that's DOOR #1:
In the alternative, the count shown yesterday is still in play but it's likelihood has diminished considerably. So that's DOOR #2:
The Sell line on the Vindicator shows selling pressure waning into today's lows while the Buy line is starting to perk up. Whatever the Elliott count, the Vindicator is signaling a relief rally at the very least. It's interesting to note that the 5 wave count shown in Door #1 is verified by the Vindicator. In Elliott the 3rd wave of a 5 wave sequence is typically the strongest, and the Sell line shows the strongest selling pressure to have occurred during what is labeled as subwave 3 (black) of Wave 3 (green) with selling pressure declining since then. Pretty slick.
Sold my 6000 TZA at 3 cents off the high of the day. That was a great overnight trade. +1800. bucks. I wanted to be out because I am going on a 3 day 2 night cruise to the Bahamas from West Palm beach Friday and don't want to worry about markets.
ReplyDeleteSee ya next week - bon voyage.