A Few Comments Going Into the Weekend

I will use the futures chart for this because the price action contains the contraction in price better, and it’s easier to see here without the gaps.

If we have put in a major high, we should move down impulsively. In order to do that, we need some waves with extension. Into yesterday’s close, I was glad to see the structure we had, and I liked that we had closed at the trend line, because that’s where a gap down can occur (discussed here). So far, that part worked just as planned because we got the nice gap down.

My only concerns for the time being are in regards to the strength of this move. If we’ve entered a third wave, it should go much lower. And in fact, so far we’ve only gone to equal legs. It’s also possible that we’ve actually completed a whole 5-wave structure down, and I discussed that here.

But, looking at it more obviously, if we’re in a 3rd wave still, we should go much lower (we still may). But if we don’t, either that speculative count discussed earlier is in play, or this has been a 3-wave move only (the red count below), which now puts us in the cruel scenario discussed here.

ES

If this is only a 3-wave move, that does not also mean that we’re going to screech straight to new highs again, either. After a rally like that, even if the market is ultimately bullish, it should—in the very least—undertake a fairly significant correction of some kind first prior to resuming. It could just mean that this red a-b-c is just A of a larger degree (with a B and then a bigger C still to come). There are many possibilities, and we will try to discover those as things develop.

But, because of the parallel rails discussed earlier, and because of the not-as-big-as-expected gap down, I have taken a far more defensive posture here than I had going in to today.

Interestingly, the futures market closed just above its 89-week SMA, whereas the cash session closed just beneath its. Ha! The great divider between bull and bear markets has left us without clarity. Thanks, Obama. (That’s a joke, I’m very politically neutral irl).


A quick look at Bitcoin. This structure is finally starting to look like it might break down (did I already say finally? Jesus).

But, considering where it stopped (for now at least), I can’t rule out that it might rally one more time, too. Maybe it bounces on the trend line. If this had totally failed, I think equities would have stretched their legs and given us that extension I want to see, but it didn’t so maybe there’s another gasp we’re going to see.

BTC

So, lots can happen here, hopefully we have a major top in, maybe we see some strength still in the short term early next week.


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One thought on “A Few Comments Going Into the Weekend”

  1. I really like today’s 10% drop in bitcoin. Enough to really stick it to crypto bros, but has room to crash further. This looks a lot like June 9th (Thursday) + June 10/11/12 (Fri-Sat-Sun) compressed into 1 to me. What happened next was such epic bear porn, it convinced me to go long for the next 2 months lol.

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