In prior posts (e.g., here) I had been examining the potential inverse that was forming and used it to generate a target. However, as we made a new low, that structure is no longer suitable.
So, let’s look at something else on that same scale. So long as yesterday’s low holds, we can view the structure as a large bullish wedge (red structure) and we can look for a couple of targets. The lower orange box is the 50-61.8% retracement of the decline from 3/29, and the upper orange box is the same retracement of the total decline from the top of the market:
It is possible that those levels introduce supply, and we may find resistance at the bullish wedge structure, giving us a new inverse possibility as well (where yesterday’s drop was the “head”). Such a move may behave roughly like this:
Alternatively, if the market moves up very sharply, it may cut through all of that supply and if they hunt stops above the 3/29 high, we may then get a retracement that retests the wedge from above:
All of this is conditional upon us staying above yesterday’s low. If that fails, I will simply have to observe for a while until I can see something else that I like.
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