And Now Let’s Look at the Bullish Case, Too

This morning, I wrote about the danger of consensus. And since so many folks are expecting 4000 (bears expect to cover there; bulls expect to buy there), all that concerted buying may simply be absorbed by someone actually wanting out. But the alternative is, of course, that we never actually even get there in the first place.

The little green bear wedge we’re in now is still decidedly a bearish structure, however, they can, on some occasions, also be bullish structures. It is preferable to see 3-wave corrections, so corrective bear wedges and bear flags normally only have “two peaks.” But you can see that this now has “three peaks.” And so though it absolutely could still be corrective, it now also opens the possibility for it so be an impulsive wave (which are 5-wave structures, with “three peaks”).

So, until we actually see 4000, it is possible that this is a nest of ones and twos, first of intermediate (orange) then of minor (green) degrees.

If this wedge breaks down, perhaps everyone will see it and lean into shorts, and that’s also about where I would expect the green 2 to end, perhaps another retest of the channel we’re in.

It would have been better to break down overnight. So, just alerting you to all of the possibilities as I see them here. I will carry this possibility as an alt now on the S&P counts page.

ES


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