We had an outside day (lower low and higher high) with a lower close in the cash S&P500 Monday. The price action confirmed that the previous high of 1576.09 set on the 11th was a fractal high. More evidence that wave iii’ ended there.
We now have another price pulse moving downwards from yesterday’s high. It should be noted that the push up into yesterday’s high from last Thursday’s low retraced a Fibonacci 61.8% of Thursday’s decline. This implies the two swings are related and allows us to add another Fibonacci ratio to our chart (shown in orange). Note how this new projection strengthens the conclusions already arrived at.
Timing. I do expect a short-term low to be made Wednesday or Thursday. Will it be the low that completes Elliott wave iv’? Time will tell. For now I am keeping my stop loss at 56.81 on the SH trade.
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