It's been an exciting week for what most thought would be boring with Wednesday close and all... but today might be the sleeper day as the tries to hold above the triple bottom tag yesterday. It looks like an inverted head and shoulders pattern formed with that low, or is at least trying to form the right shoulder today. If it does then we might see a breakout to the upside on Monday, which will also look like an ABC wave pattern up and the C part would be Monday.
But on a bigger scale this just would be the left side of an A from a large "M A" pattern. This is a bearish pattern would suggest a drop below the 10/29 and 11/23 lows is coming... probably Tuesday. I'm guessing on the "when" part as if the market rallies today for the C wave up then it could happen on Monday as that ABC up pattern would complete itself. Of course if the pattern does not play out then we are just going lower from yesterdays bounce high and the IH&S pattern will just be a failure.
The main thing here is that there's nothing bullish in either setup except for a short term bounce. The bigger picture is very bearish so once this bounce is done I expect the triple bottom lows to be taken out with the next drop. The Brexit issues is back in the news and scheduled for a vote this Tuesday, so it could rock the the market again like it did the previous time several years back. Naturally if everyone is expecting it then it's likely not to affect the market so keep that in mind too.
I just haven't been paying much attention to the news about it to see if the market seems worried about the vote or not. A lack of worry would tell me the vote can move the market, but if the market is focused on the vote and expecting a bad outcome then it's probably already built in to the market. Regardless of what news event is out there the patterns the market is making is bearish and unless the Fed come in and save it I'd expect a drop through the triple bottom to come soon.. probably next week.
Today might be the only calm day of the week with the bulls trying to get a rally going up through overhead resistance. I wish them the best of luck but it's likely all for nothing as the pattern they will setup (the "M A") will take them much lower on the next big drop. One could also see a large wave 1 down from the 2812 high on 12/03 to the low yesterday and then the bounce up from there is making the wave 2 (or B) and once it completes (should be an ABC pattern) the next move down is going to be very ugly. Have a great weekend.
