I see a ton of risks in the market and sentiment that resembles extreme euphoria. Structurally, I believed we had all the ingredients needed for a terrific bull trap. But that requires sellers to take the market down overnight. And there hasn’t been any of that yet. What I’m looking for is a big gap of 2%+. Tonight has been muted. Totally flat.
If sellers do not arrive in force and soon, I may need to recount the whole structure impulsively, and we may be headed for the channel strike I’ve referred to before. If I am wrong about the anticipated selloff, I apologize, the move on the Lira, oil, and everyone’s giddiness may have turned me into a party pooper.
If sellers do magically come to the rescue, we may count the move off the most recent high bearishly as a wave 1 and 2 in this way:
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