Another volatile day in the market – perhaps a short-term selling climax? After falling a good 45 points the cash S&P500 roared back to finish positive on the day. It was a REVERSAL DAY: the market made a new daily low but closed above the prior day’s close and the current day’s open. The trend to new lows was not able to be sustained by the end of the day as the bulls were in charge at the close. The RSI has now confirmed the bottom by turning up and we have a technical “buy” signal in place.
Although we slipped past the point where “b” is 1.618 times “a” (it was 1.742) the market reacted quite violently near here and so I will stick with my Elliott interpretation of an Expanded Flat. Why was the market dragged a bit lower than the 1.618 level? Perhaps two reasons: We had a nearby Gann target from the August 8 high and the market was drawn to the 23.6% retracement level from the 2002 low! 1370.1 is the calculated figure, the low was 1370.6!
Conclusion: A buy signal is in place but I still believe the larger trend is down. Now I need to get to work on determining where the next significant high (the "c" wave in our expanded flat which will end the larger wave 2 or b) will be.
Although we slipped past the point where “b” is 1.618 times “a” (it was 1.742) the market reacted quite violently near here and so I will stick with my Elliott interpretation of an Expanded Flat. Why was the market dragged a bit lower than the 1.618 level? Perhaps two reasons: We had a nearby Gann target from the August 8 high and the market was drawn to the 23.6% retracement level from the 2002 low! 1370.1 is the calculated figure, the low was 1370.6!
Conclusion: A buy signal is in place but I still believe the larger trend is down. Now I need to get to work on determining where the next significant high (the "c" wave in our expanded flat which will end the larger wave 2 or b) will be.
No comments:
Post a Comment