The market continues to hold the 1489 area (the 10/24 low) and formed an uptrending bar yesterday. This ended the downward moving price pulse that began at the 10/31 high and began a new upward moving pulse from Monday’s low. I may sound like a broken record but I am still waiting to resolve the question: Can we hold the October 24 low?
A positive since October 19th is that the RSI has held the area associated with bull markets. A negative yesterday is that we rallied on lighter volume. A neutral is that we moved right up against the short term (red) moving average, which is also just about where the weekly Drummond geometry PLDot sits as well as the 50% retracement of the last price pulse. Thus, we might be up against at least short-term resistance and might have to test the low once again.
With the cash S&P500 being range bound since mid-October I have slightly revised the wave count on today’s chart. The bigger picture remains the same in that we still need one more move to new highs to complete the five wave pattern that may have begun at the August lows. The main change is that I now have the fourth wave (iv’) of the pattern ending at Monday’s low as a Flat from the October 11 high. However; if four is not complete we may see continued choppy action over the coming days as the pattern continues to evolve.
One reason I changed the count is to better reflect the symmetry and balance in the impulsive price action from 8/28 to 10/11. Working within this area provides a nice Fibonacci cluster at the high (see chart).
Bottom Line: I’m still waiting to see if we can make a bottom. As stated once before, the “ideal” way to end this consolidation would be to close below 1500 (without breaking 1489) while the RSI stays above 40.17 setting up bullish divergence. Is it possible to have an “ideal” outcome? We’ll see!! Meanwhile I remain on the sidelines.
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