Our top from August 31st is following along very nicely thus far. Let's update some of the key points have developed and find out where we are potentially headed.
Daily
The momentum on the daily timeframe followed through beautifully with a breakdown into Bearish Control. In order for continuation, the bears need to step in to prevent momentum from breaking above 60 - 70 and holding support in order to confirm a breakdown in bullish momentum - I would prefer a rejection at 60.
As a sub-count, the daily has played out perfectly so far. The bears need to hold the price below the local top to avoid turning the tides back to the bulls - but losing the top would not be a full invalidation.
As we had determined earlier, the argument for this rally being a bullish impulse drastically weakened after the latest sell off. At least for me personally, the retracement is far too deep for the second sub-wave of a wave 3.
This wave would have breached past the .618. The second wave is, more times than not, shallower than a 4th wave retracement - typically only pulling back 23% - 38% on the extreme side. Such a deep retracement indicates an extreme loss of strength and confidence from the buyers side of the market.
As far as the possibility for more upside goes, I believe that if we do end up continuing to the upside, it will have to do so correctively (The white ABC illustrated above).
Locally, this is what I'm looking at (shared in my short term post):
This local count would be in confluence with the triangle count - WXY correction to the downside.
The alternative count that I am considering is this - in confluence with further corrective movement upwards:
Weekly
On the weekly chart, momentum is at an extremely important area.
Momentum on the weekly chart has failed to break bullish. It is on path to retest the Bullish Control Zone, but if the Bears can force a rejection, it would be detrimental to the intermediate trend.
Another point of significance comes from the BLX weekly chart - specifically the line chart. For the first time ever, there is bearish divergence between the price, the RSI, and the MACD histogram printed on the weekly timeframe. While divergences can absolutely be invalidated with a big enough move, I think that this offers a little glimpse through the window of what's going on with the trend behind the price action.
Daily
The momentum on the daily timeframe followed through beautifully with a breakdown into Bearish Control. In order for continuation, the bears need to step in to prevent momentum from breaking above 60 - 70 and holding support in order to confirm a breakdown in bullish momentum - I would prefer a rejection at 60.
As a sub-count, the daily has played out perfectly so far. The bears need to hold the price below the local top to avoid turning the tides back to the bulls - but losing the top would not be a full invalidation.
As we had determined earlier, the argument for this rally being a bullish impulse drastically weakened after the latest sell off. At least for me personally, the retracement is far too deep for the second sub-wave of a wave 3.
This wave would have breached past the .618. The second wave is, more times than not, shallower than a 4th wave retracement - typically only pulling back 23% - 38% on the extreme side. Such a deep retracement indicates an extreme loss of strength and confidence from the buyers side of the market.
As far as the possibility for more upside goes, I believe that if we do end up continuing to the upside, it will have to do so correctively (The white ABC illustrated above).
Locally, this is what I'm looking at (shared in my short term post):
This local count would be in confluence with the triangle count - WXY correction to the downside.
The alternative count that I am considering is this - in confluence with further corrective movement upwards:
Weekly
On the weekly chart, momentum is at an extremely important area.
Momentum on the weekly chart has failed to break bullish. It is on path to retest the Bullish Control Zone, but if the Bears can force a rejection, it would be detrimental to the intermediate trend.
Another point of significance comes from the BLX weekly chart - specifically the line chart. For the first time ever, there is bearish divergence between the price, the RSI, and the MACD histogram printed on the weekly timeframe. While divergences can absolutely be invalidated with a big enough move, I think that this offers a little glimpse through the window of what's going on with the trend behind the price action.
Comment:
I just realized that instead of showing the micro count to the upside, it provided a link to my other post:
