I am looking for pink “C” to complete (see this from this morning). I find it encouraging that though we did break down from this flag, we did not do so precipitously. That may indicate that selling momentum has evaporated. And it better have, with only 0.79% of stocks in the S&P now over their 50-day MA.
Locally, yesterday and today, we appear to be creating a “broadening formation.” It can be “false” (i.e., not a true triangle), in which case, this morning’s drop was the orange “5” of pink “C” and we’re good, with orange “4” having been just a 3-wave move. If so, we should recapture the bullish wedge lower rail, I would expect today, and rally next week.
Alternatively, the “broadening formation” is a true triangle, and orange “4” is more expansive, in which case we should have one more lower low to make, prior to a huge rally commencing, but perhaps later, into next week (though today is also still possible).
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