Looking at the day session we have gapped down on the jobs report. As you know I have been using the triangle interpretation with an alternate wave pattern i.e. the flat correction to describe w.4 structure. Prudence told be to let this pattern play itself out and not allow myself to be caught on the wrong side of the market. Yesterday was certainly surprising. The upward thrust and subsequent closing price essentially eliminated the ascending triangle interpretation but it hasn't eliminated a host of other three wave patterns that can give a trader fits when trading a corrective pattern of this nature. For example, the ON session traded above w.3 high of 1224.75 in what I believe was a stop running exercise to clean out all the protective stops of bearish traders. If I utilize that event , an expanded flat interpretation must be utilized OR a running triangle interpretation IF w.4 is still unfolding. If w.4 had completed at what I have labeled w.a circle then a trader must be looking for the termination of w.5. So certainly there is much to discuss. I will post all of these interpretations in my weekly wrap up which is posted on Sunday. In the meantime we will stick to the flat correction as depicted in the attached chart and wait for confirmation as to what is unfolding.
Best of Trading
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