Good morning, traders. Last night, I was watching for a possible HnS to target the blue zone in the mid-10000s. This morning I woke up to see that price had returned above the neckline without reaching that point. Instead, it bounced in the orange demand zone that printed on July 13th. In doing so, it did print the H4 hidden bullish divergence I said I was waiting for in yesterday's TV update.
At this point, there are two possible roads I can see price taking. I am leaning toward price printing a triangle as drawn. We have an ABC for the A wave and appear to be working on an ABC for the B wave. The other possibility is that price prints a flat correction resulting in a flag. This latter possibility would still have price printing an ABC for the A and B waves but then 5 waves down for the C wave. That C wave would have price targeting the blue demand zone.
Why am I leaning toward the triangle rather than the flat correction? There are two reasons: 1) In terms of the local TR, we have seen expanding volume and increasing candle spread from the July 28th swing low suggesting a move up from a Spring and, if so, then 2) we expect consolidation at the top of the TR before heading higher, which is what we are seeing. This consolidation is at the local TR resistance, the 2018 TR resistance, and the flag resistance denoted by the dashed red line. The target, based on the height of the local flag, is still the yellow box that I have had in the low-to-mid 13000s.
This target should be wave 5 off the double bottom, as shown. We could then expect a retracement to the blue zone at that time. Price has been printing the ascending broadening wedge and the blue zone aligns with the target based on the height of the wedge. This would take price just beyond the 50% retracement of that 5 wave advance giving us a pretty good larger wave 2.
H4 RSI printed hidden bullish divergence, as mentioned above, on RSI and MACD's histogram. Stoch RSI remains oversold but is nearing a break out. RSI is bullish at 63. Our premium Discord members now have access to our trading basics course included with their membership! We continue to add more content for new traders to learn how to be more effective and consistent when trading the market. H1 RSI is nearing its descending resistance. A close above this resistance should indicate further price appreciation. Stoch RSI is topped out and likely to need a rest before RSI breaks above its resistance. Hidden bearish divergence is printing on MACD's histogram supporting the belief that price will pullback before heading higher. This pullback would be inline with the outline of expected price movement.
M15 shows the IHS that printed with a target of ~$12225. Price appears to be printing a pennant/flag on that TF which would then have a target of $12500/$12525, based on the height of the flagpole. I am not a fan of this target because it really doesn't align with any other areas of confluence. However, the height of the flag as a target would align with the generally expected target of the IHS at around $12225. As always, if price continues moving higher than anticipated, traders can utilize the pivots on the various TFs as possible targets until price prints a larger retracement.
Every day, we have a choice to act positively or negatively, so if you get a chance, do something decent for someone today which could be as simple as sharing a nice word with them. You just might change their day, or even their life.
You can always click on the "share" button in the lower right hand of the screen, under the chart, and then click on "Make it mine" from the popup menu in order to get a live version of the chart that you can explore on your own. When you do, be sure to explore the other TFs to see what I'm watching on those TFs.
Cheers!