In the last post, I looked a a variety of ways I believe the market can proceed. I want to add three things I also see that could be very bearish.
1. There is a structure that we all saw that broke down, and we’re back involved in that structure now. I am referring to the head and shoulders top from which we broke down. We are back at the neckline now.
That doesn’t tell us a whole lot, other than that we’re at resistance, which we already know because we’re at the consolidation from early June. But, it’s a good reminder of the prior breakdown.
2. I have found some wave balance right at today’s high, after doing some digging. It’s not too shabby.
3. Counting it this was is important for this reason. If everything from the high to the yellow “a” is a single structure, and if we are destined for lower prices to come, we would want this to be some kind of “b.” Now, it can get a lot larger, but, it may not need to and here’s why. It just so happens—and you guys haven’t seen me use this tool much, but it can be important at times like this—that if all of yellow “b” finished today, it bears a precise relationship with yellow “a” in time. And in fact, if this is all of “b”, it’s lasted exactly half as long as did “a”:
That’s a nice relationship if it sticks.