Yesterday I had a problem with one of my computers hence I could not dedicate
much time to the markets so today's technical follow up will be a brief one.
As I mentioned yesterday in my opinion the corrective rebound off the November
16 low is not over yet as long as bears do not reclaim the 200 dma.
Judging from the internal structure of the pullback off last Monday's hod
it seems that they will not be able.
Yesterday I suggested that price could have completed the first down leg of
a Zig Zag, I was wrong since instead of a bounce, we had follow through to
the down side but with an overlapping move which ended with a small wedge
close to the 1403 support line.
The pattern so far can be labelled as a Zig Zag (abc).
If price is unfolding a wave (B) it is still too short to be considered done
hence the pattern would require a larger Zig Zag with a potential target in
the range of 1393 - 1385.
If this count is the correct one then the rebound should fail establishing
a lower high:
If this pattern plays out it would strengthen the larger picture (Bearish)
wave (B) scenario since we could even have a failure at the November 6 peak
= 1433.38.
As I posted yesterday on Twitter/StockTwits, it is worth monitoring the KBE
etf since the internal structure of the pullback off the November 23 high
is suggesting a sideways corrective pattern that could result in a bullish
Triangle:
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