In this case a triangle marks the end of a complicated "combination pattern". [A combination pattern is labeled (X - Y - (and sometimes) Z, but when you see a triangle form that marks the end of the pattern, because triangles (in theory) never repeat. More on these patterns, from Elliott Wave International ]
Looking at this pullback from a classical technical analysis stand point, we simply went back and built a base around the 2400 level (as we should have done last Friday...), and held the previous low.
Higher low is always bullish. 2. Double bottom is bullish. 3. A shakeout just below the previous low, followed by a powerful reversal, is also bullish.
To add to my bullishness is the fact that the market made yesterday's low, while the $VIX remains contained. At $VIX 12.50 there's little fear in the market, and you're just not going to see big downside moves at $VIX 12.50. Once the $VIX breaks below $12 we should already be off to the races again, perhaps on this mornings jobs number, but mainly for the reasons I pointed out in yesterday's update. And to top it off it's short covering Friday, and Sunday is a full moon.
Speaking of yesterday's update
Oil rebounded into a head-fake wave B, as predicted, and sold off into wave C.
Now that we've seen a proper pullback in Oil I like it again.
The most rudimentary A-B-C corrective pattern, looks the one we just saw in Oil, as seen on the $USO chart below.
Now that consolidation is complete, don't underestimate the strength, and duration of the next rally.
AA
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