$ES is forming an inverse head and shoulders pattern. A successful right shoulder formation and neckline recapture targets 4600:
I apologize for not first anticipating and then calling for a selloff with the depth and speed we’ve seen. It’s no doubt caught many off guard. That said, it’s a terrible place to call for further lows, in my opinion. Keep an eye on the bullish wedge forming on $SPY. Other formations like this have failed on the way down, but the last one will not and it’s safer, in my opinion, to assume we’re much, much closer to a bottom now than a top here.
We’re just beneath the 250-day EMA, terribly, terribly oversold. All the conditions are present here that were present at the February 28th low in the COVID crash, and we should get at least a strong counter-trend bounce, if not a permanent low altogether. At least that is how I am seeing things here.
At a minimum, I expect this gap to get filled sooner rather than later.
Some points on $BTC:
- Way back when, I saw technical evidence for Bitcoin having potentially topped a top of very great significance. I stuck with that count for a while, and it worked well, culminating in the big spiky drop (e.g., here, and here).
- That said, once we got that far, I felt benefit of the doubt should be returned to the bulls, and I’ve been looking for paths for it to begin moving up again since. And, after all, most of the decline has included a lot of choppy, overlapping waves, symptoms often of corrections rather than trending markets (though of course no guarantee that it’s corrective rather than trending).
- It still may produce a powerful rally, but bulls are quickly losing their window of opportunity, it seems to me.
I will move a chart over from a recent analysis (that analysis may be found here). This pattern at the time looked to be an excellent 3-wave move, but it’s not really behaving like one (yet) at its “end,” as it needs to produce a powerful rally ideally from here. It’s shown no signs of doing so yet. It even lacks sufficient bullish divergence on the RSI to make me believe that one is right around the corner.
In line with the broader thought on $BTC posted yesterday (here), this local structure continues to count well as a 3-wave move. Parity between the two impulse legs (orange “a” and “c”) occurs right where we’re at now, so this would be compatible with a somewhat significant low being put in, if it wants to here.
There are other fib relationships that wave c can have with wave a, but this is the most ideal, the most “pretty.”
Happy Solstice to any pagans out there.
I hope $ES is finally going to give us a trending market. The move off yesterday’s lows is off to a great start. I would count us as being within the 3rd wave of minuette (orange) degree. The typical length would take us to the orange box, but it may also extend to either of the two extensions above that if it needs to (or even higher, too, but that would be getting extreme). After the 3rd wave is complete, we would like to see a 4th, then a 5th to complete minute (blue) 1 before getting a 3-wave pullback.
Keeping in mind that I could be completely wrong (it’s FOMC day and these can do quite unexpected and wild things), I may be able to rule out the “deeper minute (blue) 2” discussed earlier. The depth of the selling today makes it—on my interpretation—more akin to a 2 (of subminuette [red] degree).
If we rally from here in a third wave, the expected length of that red 3 should carry us to the orange target box, but since that will give the structure as a whole a “stubby” look given the depth of the two, I won’t be surprised to see us extend to one of the higher fibs above the orange box either (noted by the two orange horizontal lines).
Here is some micro counting for the geeks.
The rally off the low can be counted as a correction, and since my sympathies remain tilted toward bear clan for the moment, I prefer this. And it’s my website so I can do whatever I’d like to.
It looks good as a 3-swing move and has good fibs. We would view blue c as an ending, expanding diagonal.
If this count is correct, Monday should give us a gap down.
$TLT counts well as a corrective pattern. If this structure breaks down, it may fall below $130.
This inverse on $Oil target $75.