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In the last 48hrs Dow futures have been in a circa 26025 – 26525
range, which is most likely stop runs in both directions.Looks like last nights low was a ‘pean’ trap as tepid called it.
Expect a high ‘pean’ trap next time.
Never give up, never surrender.
The Dow late drop wednesday and spill down today
gives yesterday S1LToday S2H should have am hod and pm lod and in
the way of things a spill down friday.Let’s take care, see how we go.
Never give up, never surrender.
DOW: I’m still thinking that the Dow is trying to form some sort of sideways consolidation as a B wave. The action is all happening underneath the key line of resistance at 26,700.
That does seem the odds play on the Dow.
There is also the potential for a large h&s
and a smaller invh&s but like clouds you
can see shapes come and go.Never give up, never surrender.
RUT: the Russell 2000 seems to be a different pattern compared to Dow and SPX. RUT appears to be a more decisive five wave pattern not yet complete, with a target of the 1420 area. Currently RUT seems to be forming a 4th wave triangle (and it might be only wave iv of 3).
For the Dow I’d be more confident in calling this consolidation a B wave if it can rise to overlap the resistance at 26,700. It’s certainly possible that the current action can do that in the form of a rising wedge thing, as shown on this revised version of the chart.
And clearly any short position has a much higher probability of success (and logic) in the 26,700 area.
The next pean trap will be on a high tick and
your Dow 26700 could fit … best if it were
late today, then a black monday !Never give up, never surrender.
Clearly ‘something else’ happening here. I think it can go higher. I don’t have any positions.
Edit: it *might* want somewhere in the 27,000/27,200 area.
Small short Dow at 26900 … stop 28000 … limit 26000 ( x 2 )
Time to try again on the short side.
Only a new ath before 26000 would be a problem or
a slight inconvenience !Never give up, never surrender.
I have added to the above and my position is now …
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Small short Dow at 26900 … stop 28300 … limit 26000 ( x 4 )
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If we hit my stop before my limit then I will take a full
year off trading to focus on other projects.
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In fact I may never return.
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I have other invitations for my time and energy…as we all do.Never give up, never surrender.
Closed all four Dow 26900 shorts at 26850
I have a small Dow short at 27000 … sadly just the one.
Never give up, never surrender.
DOW: the Dow might be trying for a C=A. The pattern is a bit scrappy. On the chart I’ve shown a couple of possible uneven triangles as ‘B’.
Wave ‘A’ (or 1) was 900 points so the target area for C=A is 27,050/27,150. There’s another option that points to 27,200.
Strong resistance at 27,000.
Unfortunately this can also be a ‘failed fifth’ at 27,000 (very close to the lower target of 27,050).
Monday is ‘day 2’ and I can’t see how this potential five can last all the way to Wednesday. Possible, but not likely.
I don’t have much confidence is these suggestions and I’m content to stand aside and see what happens.
Dow daily: the daily chart is very difficult to analyse. One option I had was the leading diagonal upwards, and the other the expanded flat. Currently it’s slap bang in the middle and impossible to predict.
On this chart I’m showing the bullish view of the leading diagonal. A leading diagonal can be made up of overlapping fives, overlapping threes, or a combination of these. Currently the Dow *might* be trying to form a triangle thing that can point upwards or downwards. I’m showing the upwards option on the chart.
Frankly I think the market is impossible to interpret at this stage and any ‘view’ can be smashed by a tweet. I’d rather stand aside and see what develops, even if that means just monitoring the market for a few weeks. Better to be safe than sorry.
RUT: the Russell 2000 was sporting a ‘perfect’ 1,2 sequence and then started heading north very strongly, which I expected was the start of wave 3. Wrong! The RUT fell back to support just as quickly as it rose. It then looked like it wanted a five down to the 1420 area, but the sharp rally of the past few days has put a question mark over that.
I suspect some other sort of basing pattern is forming, particularly as RUT has forund determined support at the ‘perfect’ 0.236. But unfortunately, like the Dow and SPX, the pattern is impossible to predict (at least for me).
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