Monday, October 4, 2010

Cautiously bearish...

Today's price action dropped us bears right in the middle of a potentially bullish setup. Corrective patterns have a tendency to repeat themselves during a prolonged impulsive move. When I marked subminuette wave 2, it was with a 22 pt pullback. Wave 4 also was a 22 pt pullback. And today's low marked yet another 22 pt pullback. In addition, it did it within 7 pts of a 786 retracement. One more failed attempt at the 1129 area would provide the market with the divergence it needs to get a strong bullish rally going.

So, the bears need to push through this area tomorrow and the next day. Only then will we get to our real test area of 1095/1100.
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