First note. On the cash session, closing below these prior highs (green arrows) is negative. And especially also closing under the midday high (red arrow). What matters most is tomorrow’s open, so a gap up would resolve this. But, barring that, it’s negative and a rejection of all these higher prices.
Second Note. And on futures, you can see now just how much this recent price action (green arrow) looks like a 3-wave move (blue a-b-c). We went up, then sideways, then up. And now we’ve retraced back into the consolidation. That’s pretty much exactly what I would expect in an internal “leg” of a triangle. And “E-Waves” often fall short of trend line strikes. So this bearish count is very much alive still.
If all this doesn’t hold and we start to sell off, I expect us to move somewhat quickly to ~3420. My target is a confluence of four things:
- An “underthrow” of this ending diagonal (red structure)
- Orange “C” = 2 x Orange “A” at the bottom of that orange box
- We get to pierce the 250-week EMA
- Jeffrey Tennant (a reliable internal wave structure technician) has an eventual target (for the whole big market decline) right there at those levels as well
That’s a lot of stuff all in the same spot.
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