Sunday, November 21, 2010

Lots of downside risk in the current range

Friday's move down stopped right where it should have and reversed. That makes this current move impulsive, but should we get long??

Here are the different count possibilities:

- In Wave 4, looking for a flat or a triangle
- In Wave 5, looking for a test of the previous high

The best long trade right now would be for this small wave up to retrace some tomorrow (1185 zone) and put in a bullish reversal bar. This would be good for another run at the top.

The best short trade right now would be to short the previous high and run it back down to 1170 area.

Otherwise be patient.
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