The market is almost at a falling trendline of resistance, which should stop it on the first hit. The question will be… does the move down go back to fill the gap and head toward a lower low, or do they have the bears trapped here and plan on just dipping briefly only to gap up again tomorrow over the resistance level?
With the positive statements out about the debt ceiling we could be in rally mode for the next 2 weeks? We are pretty oversold on most charts and due a relief rally. Unless there some unknown negative news on the horizon that they plan to release I’m leaning toward the bulls here as they certainly have the bears trapped now.
If they just pull back to around gap window later today or tomorrow (instead of gap fill) then that shows the bulls strength and ways heavy in their favor. We all knew that there would be some type of rally from something positive coming out about the debt ceiling… we just didn’t know when?
So unless they surprise again with something negative I think we are going to rally for 1-2 weeks to make the Major Wave 2 up with yesterday’s low being the Major Wave 1 down. This leaves Major Wave 3 down inside Primary Wave 4 down to start once this rally ends. Since they have offered a “temporary” increase in the debt ceiling limit the 17th has no important value anymore.
Meaning we have to look for some Fibonacci level of retracement, along with a trendline of resistance for our topping date. The 61.8% level is around 1700 SPX and the 78.6% is at 1715 SPX… so I’d think one of them should be our target for the upside high.
Time wise we have to expect the same date I’ve listed in this post as one of 2 possible days for a top. So if we hit that 1715 level on that date I’d say that’s our best chance of a great short. However, don’t be surprised if they don’t scream this up HUGE and make a new high to take out all the bears stops before they tank it.
I’m not expecting that of course but stranger things have happened. It’s probably just going to be based on how many bears are left in the market to squeeze when we get up to the first target of 1715 as I’m sure there will be many that see the Head and Shoulders pattern and try to short that right shoulder top.
It could be an accurate pattern this time or a bear trap? The date it happens on and the level it’s at when on that date will give us our best clues. Until then I think it’s long and strong as the puppets in Congress saved the day for us sheep one more time.
WOW!
Hey Red, I did not get it
Here’s what I see happening… http://screencast.com/t/eFDFm7uC
does the broken trendline mean a trap door is opened to the downside?
(after the probable failed retest from beneath, of course)
The market is almost at a falling trendline of resistance, which should stop it on the first hit. The question will be… does the move down go back to fill the gap and head toward a lower low, or do they have the bears trapped here and plan on just dipping briefly only to gap up again tomorrow over the resistance level?
With the positive statements out about the debt ceiling we could be in rally mode for the next 2 weeks? We are pretty oversold on most charts and due a relief rally. Unless there some unknown negative news on the horizon that they plan to release I’m leaning toward the bulls here as they certainly have the bears trapped now.
If they just pull back to around gap window later today or tomorrow (instead of gap fill) then that shows the bulls strength and ways heavy in their favor. We all knew that there would be some type of rally from something positive coming out about the debt ceiling… we just didn’t know when?
So unless they surprise again with something negative I think we are going to rally for 1-2 weeks to make the Major Wave 2 up with yesterday’s low being the Major Wave 1 down. This leaves Major Wave 3 down inside Primary Wave 4 down to start once this rally ends. Since they have offered a “temporary” increase in the debt ceiling limit the 17th has no important value anymore.
Meaning we have to look for some Fibonacci level of retracement, along with a trendline of resistance for our topping date. The 61.8% level is around 1700 SPX and the 78.6% is at 1715 SPX… so I’d think one of them should be our target for the upside high.
Time wise we have to expect the same date I’ve listed in this post as one of 2 possible days for a top. So if we hit that 1715 level on that date I’d say that’s our best chance of a great short. However, don’t be surprised if they don’t scream this up HUGE and make a new high to take out all the bears stops before they tank it.
I’m not expecting that of course but stranger things have happened. It’s probably just going to be based on how many bears are left in the market to squeeze when we get up to the first target of 1715 as I’m sure there will be many that see the Head and Shoulders pattern and try to short that right shoulder top.
It could be an accurate pattern this time or a bear trap? The date it happens on and the level it’s at when on that date will give us our best clues. Until then I think it’s long and strong as the puppets in Congress saved the day for us sheep one more time.
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ES resistance levels: http://niftychartsandpatterns.blogspot.in/2013/10/es-resistance-levels.html
TESLA Chart analysis: http://niftychartsandpatterns.blogspot.in/2013/10/tesla-testing-support-levels.html