This implies that there will be a re-test of the 1126 level, and a successful break will see strong resistance in the 1030 area(target of the 4th wave triangle, and remember triangles usually precede wave termination). Here's the 30-min chart:
Scenarios
- If we count the rise from 1045 as a 5-wave impulse: we've already reached the 5th wave target, based on 1=5, An a-b-c reversal down may be next.
- If we count the rise from 1045 as a complex W-X-Y correction, with W ending at 1112 high, and X at the 1086 low: we're in the Y wave with a target of around 1153 (a test of the Jan highs) based on W=Y, followed by a reversal.
- Target of the Inverse Head & Shoulders, described in the last post also points to a retest of the Jan highs.
Significant overhead resistance, negative divergences on the hourly RSIs, plus daily chart nearing overbought are all excuses for a sharp move down. Although we may generally head higher in the short-term, i would be very cautious with long positions once we reach 1130 area. The easy money has been made, and we're close to the ozone layer. I would instead be looking for short opportunities as we struggle higher. Support is around the orange rising trendline.
Wave relationships above are ideal, and they can, and DO often truncate. Watch the price action and trendlines as always.
All the best!
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2 comments:
Good analysis trendlines and a very useful site that I follow every day now. You seem to get the right balance. To add to your words of caution volume has been steadily declining throughout this rally. Would really like to know what on earth is pushing the market up like this. I can only think a significant proportion of the online community (myself included) have completely misjudged the longer-term situation, or the forces of reason have been abandoned by the markets in the short-term. AGAIN!
Thanks Chabazite, time will tell if the technicals catch up with fundamentals, or the fundamentals catch up with technicals :)
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