The rally in the ES_F appears to have ended, albeit temporarily so. Yesterday's advance to 1235 came within 4 points of the 1.232 RF that I mentioned in my week in review. The subsequent sell off that developed after the first hour of trade was on high volume and therefore a distribution day.
Gold reversed off it's high of 1432.2 and followed through to the downside. The US Dollar rallied but it doesn't exhibit the price action that one would expect of a third wave.
ES_F:
If w.b circle had ended at 1235, then w.c circle should trade to a minimum of 1195-1203 in w.c circle. Both values represent the .50 and .618 retracements respectively. Should the expanded flat interpretation win out, the decline for w.c circle would be well below 1171. A rise above 1235 would raise serious doubt that wave 4 was still in progress. Note: I have labeled the possibility of w.4 ending at 1171, where the operative count is labeled as w.a circle.
Gold ( XK_F): At the daily chart level, gold has either completed in five waves or the decline from 1432.4 is unfolding in a three wave structure as I have depicted on the ALT (alternative count) line. Either interpretation should result in further downside pressure.
US Dollar (DX_F): The rally from 75.23 to 81.44 has so far unfolded in only three waves. That's a corrective structure that implies that the larger downtrend may remain down. I have been working a series of 1-2's and this interpretation is running out of time and price. What I mean by that is that any further decline below critical support negates the interpretation. Also, if the wave structure is truly unfolding in a 3rd of a 3rd wave, then this rally should be much stronger than what I have observed since the bottom was put in. Bottom line, I'm not giving this interpretation much more latitude and admit that I may be wrong.
Best of Trading
Current price action is confirming trend in XK_F. DX_F and ES_F have not confirmed.
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