Yesterday the cash S&P500 made an “outside” day. Such a formation following an “inside” day is known by Jeffrey Kennedy at Elliott Wave International as a “Popgun” pattern. It indicates that an impulse wave may be dead ahead. In the current case it implies that we may be staring at a reversal to the upside.
Although the technicals would be supportive of a reversal here; and an apparent Impulse pattern is near completion from the May 19 high, I want to see more proof. Why should I be definitive when the market itself is indecisive? We have had two spinning top candlesticks in a row now – indicators of indecision and a potential reversal. Potential being the key word.
One final reason to hesitate on becoming a bull here: Since the move down from May 19 is five waves we know that at least one more five wave pattern to the downside awaits after any corrective bounce.
Although the technicals would be supportive of a reversal here; and an apparent Impulse pattern is near completion from the May 19 high, I want to see more proof. Why should I be definitive when the market itself is indecisive? We have had two spinning top candlesticks in a row now – indicators of indecision and a potential reversal. Potential being the key word.
One final reason to hesitate on becoming a bull here: Since the move down from May 19 is five waves we know that at least one more five wave pattern to the downside awaits after any corrective bounce.
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