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Saturday, May 20, 2017

Saturday, 5/20/17 update

On Tuesday this week the ES/SPX appeared to roll over into the meltdown that has been anticipated in recent posts with a strong and impulsive selloff that bottomed on Thursday.  However, the BTFD crowd stepped in early Thursday morning and generated an equally strong and impulsive round of buying.  Typical.  Markets always have a way of sowing doubt.
The late week rally to this point is only three waves, and my short term momentum indicators reached "overbought" conditions late Friday.  So the pre-conditions for a resumption of the sell off are in place.  But the problem with momentum indicators is that the market can and does keep right on chugging regardless of what those indicators are suggesting.  If they are accurate then a resumption of the selling should occur early next week and that will validate the short term counts.  If not and the rally continues to new all time highs then those short term counts will have to be reworked.
However, from an Intermediate Term standpoint the action since the March 1st highs still looks very much like a market top under construction.  So barring a sustained rally to new highs significantly above those recently attained the longer term view remains bearish.

The IT Elliott counts remain as have been presented in recent weeks, with two possibilities still open:



NOTE: dotted lines show potential EW structures and are not necessarily accurate price/time forecasts
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