Today was certainly a snoozer... that is until 2:50 est. As most of you know from my Twitter posts, identifying the current wave count on lower TF's was difficult as prices chopped back and forth. Sideways corrections are always difficult to identify the termination points because there are numerous corrective structures and combinations thereof. That brings me to a great lesson. When the water is murky... meaning a trader can't identify the wave pattern with absolute uncertainty, then stand down and wait until the water is clear. A trick that I use in such times of frustration is to find the lowest TF that I can find where the wave structure is clear. Often this will be at the 60-120-240 chart level.
After the market closed I noticed that the 120 min chart provided the clarity I needed. Here's what I know. The current wave structure has unfolded in a 3-3 wave pattern (w.a and w.b). Any pattern that starts with 3 waves is a corrective pattern. Therefore my bias to the downside i.e. new low is still intact. Any wave structure that begins in 3 waves c can also be tricky as several possibilities exist. W.(iv) could unfold in a triangle or a flat correction. The difference is that under the flat interpretation, price will trade ABOVE 1182, most likely to 1184.75 with w.c in 5 distinct waves. Other reisitance levels are provided within the chart.
Possible targets for the termination of the triangle's interpretation (not shown) will have it's termination point located between w.a and w.b. Regardless of which interpretation plays out, traders who positions themselves correctly can capitalize on the fact that new lows will eventually be reached.
Tomorrow I'll be watching this market closely to identify the operative wave count as well as targets for the next move to the downside.
Best of Trading
No comments:
Post a Comment