Today's low only got to 1061 (although several times). The bulls were there each time to turn the bears away. Today's chart shows we have prime buying signals:
- perfect divergence on the hourly macd (see how the red line's 2nd pivot is above the blue line when price makes a double bottom?), which is a very high percentage signal
- we are sitting right on support
- we are in an oversold area of the RSI where the bulls have typically bought the index.
Now that I have said that, here is what we can expect:
If the bulls take it above today's high (1072) tomorrow, then expect a likely retest of the highs.
If the bears take it below today's low (1060) tomorrow, expect a range expansion move to the downside and very likely the start of primary wave 3 has begun.
I personally am leaning towards a massive selloff tomorrow from the get go (or even a gap down). Why? Because it would trap a large number of bulls and a lot of bears would have missed the entry point. Should this be the case, we will likely have persistent selling all the way to 1000 with small (10-15 pt) rallies that get killed quickly. This would be consistent with a change of trend.
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Hi Rich,
ReplyDeleteWas wondering your thoughts on NeoWave? Thanks
njcct84,
ReplyDeleteSorry it took so long to get back to you. I actually forgot about your post there. I have never been a subscriber to NeoWave although I have read several issues. I personally am not a fan of subscription services for trades as I find the trades too crowded. However, overall I found the analysis sound and he gave lots of different stock recommendations based on EW with good stops and price targets. So I guess I would say it is one of the better ones I have come across.