If we have a weekly small range body it means that price is unfolding an ending
pattern that should complete the up leg off the December 19 low.
As a matter of fact as you can see in the 60 min chart below price has been
unfolding a potential bearish rising wedge. If this wedge is the ending pattern
that I have been looking then we need an eod print below 1352.28. If this
is achieved then next week price should challenge last Friday's NFP gap with
an "obvious" initial target at 1300.
If the potential bearish set up plays out then I expect a corrective pullback
that could reach the trend line support from the October 4 low & gap fill
(daily & weekly) in the area of 1289.
The main scenario remains the same with price unfolding an impulsive wave
(C) from the November 25 low, which has a projected target at 1376.55
Therefore we clearly have an equity market in "rally mode", since last Monday
every single attempt to kick off a correction have been aborted by dip buyers,
but at the same time we have plenty of warnings that are signalling that a
reversal should be taken seriously.
Yesterday's surge of TVIX (2x long VIX etf), which achieved a bullish Island
Reversal, is sending another "big" warning that the overdue correction should
be around the corner.
Contact: If you would like to contact the author, you can e-mail him
at thewavetrading@gmail.com
The main objective of this project is to share my views on several markets
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