Good afternoon, traders.
Let’s review the two structures we can observe that I discussed in this weekend’s newsletter.
If head & shoulders, we remain under the neckline:
If parallel rails, we came back to fully retest the lower rail (on Friday we came close but not to it, today we came to it):
Going into today I had a bullish bias because the rally we just had could be counted as an impulse wave (also discussed in the weekend article, but you can review that chart here). I also discussed how I was going to remain unfaithful to either view, and that I might change my mind frequently until these patterns resolve. And I got to prove that right away last night. If we had a completed impulse wave up, with a retracement as well—for some kind of 1-2 up—I was looking for a possible 3rd wave up today. And Globex started off initially looking quite good with that big gap up opening on the government shutdown can kicking.
But then it looked like it was stalling and I could tell early on that the dollar and especially the long end of the curve were both very strong. So, I flipped over night, closed my longs and went short.
Now, today, we kind of didn’t do much. But, I have a few comments:
So, we’re not in any better position to gain clarity today than we were going into today. Either scenario can play out. I was hoping for bullish action today and didn’t get it, and because of that, I’m now open to bearish action from here. I may not get that either, but I will let price tell me what do. I am favoring the bears here for the time being, but overnight strength will remedy that, so if the bulls show up, they’ll show up. But I am worried that they’re not ready for center stage.
Ok, let’s see what happens!