Some Aftermarket Thoughts

I continue to struggle to gain conviction and I can see any of several things playing out.

If one of these is in play, and we’re in a countertrend rally, we could be in a big triangle, possibly a “B-Wave,” like this:

ES

Now on that, I have positioned the orange “C” at equal legs, but it may also extend if we really have a good short squeeze, and it can go to other, higher fib relationships.

One weird thing about this possibility is that if this count is correct, I would expect this rally to fail, and yet, on the interpretation I have been suggesting here—that this could be a Wyckoff accumulation—our moving up almost at all from here would involve us recapturing the “support lines.” That would present me with some conflicting data. The count would suggest that we should move lower, the accumulation pattern would suggest something bullish. I am unsure how I would resolve that other than to observe those trend lines with care. And in fact, those trend lines served as overhead resistance today. Is it possible that we fall straight from here? Anything is possible, but it would be better, I would think, to see a bigger squeeze first.


On the bullish view (discussed here), we would be entering the 3rd blue wave now and we we should go to the orange box or higher, probably with a gap overnight tonight.

What will distinguish these two options is: do we get just 3 waves up or 5? On the bearish view, we have another leg to the rally, then drop. On this view, we have another rally, then consolidate, then have another rally (for blue 5), then drop.

SPY


I can’t really decide which of these two is more suitable, based off the price action alone, or even yet if either are suitable, as we haven’t even managed to close above many of these recent highs yet.

So, we will simply have to see. I’m fairly comfortable for the time being having both longs and shorts for now.


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