Monday, July 26, 2010

Bulls still have it...

...while today's price action did not contain an acceleration gap, the trade setup still worked on the long side, but if you managed your stops as I did (see chart), then you only ended up with a 4 pt profit. I have to admit that while price continued higher, the momentum for a 3rd of 3rd was anything but impressive. So, while I still show the bullish count as my primary count, the bulls should be concerned over the lack of breakaway price action.

Looking at the 15 min chart, it appears that we may have completed subminuette wave 3 at today's high. This would lead to a subminuette wave 4 tomorrow morning with a correction being contained to 8-10 pts (with an extreme move being 13 pts). If price moves more than that, then be on the look out for a potential bearish wave 1 and the possibility of shorting on a wave 3 confirmation. The potential for the start of wave 3 should always be in the back of your mind if price breaks any key pivots from here on out.

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