From the previous article I posted in which we looked at two possibilities. The contrarian view played out nicely as we looked at the 9696 level to hold up or fail.
The Contrarian view. from the SC post – A break of the 9696 level may result in a subsequent pullback to the lower 8k area, or the current major support zone
Since the 200 DMA often acts as a major support or resistance level, momentum could stall here and a pullback to the major support level is very possible. The area between 9340 and 10k has numerous overlapping resistance levels in both the short and mid term which could result in a sudden selloff and subsequent pullback. 9696 is almost a line in the sand here. This would only provide an opportunity for a swing or positional trade as a dip into these levels will likely be short lived.
The 9340, though important, was not my original level of focus. At that time my focus was on 9696 level or the original level we broke out of. I was looking to see if this resulted in a throwback. It did and since it failed to break back through we can consider this a “fakeout”. The next level to look at is the 9340 level where resistance now becomes support.
There is a higher probability that this is an extended wave B in a broader leg (4) corrective cycle then a continuation move. Since C waves often pullback to wave 4 of the current cycle it is very possible BTC pulls back to 7800 to 8400. This is why I mentioned a breakdown of the 9696 level may result in a pullback to the lower 8k support zone. A breakdown of 9340 at this point adds much to the probability we re-test the lower 8k range.
There was another count we were looking at that took us to 11k from here, but a break of 9500 negated this count. Keep in mind the broader count carries more weight and the shorter (fractal) counts which are based on short term noise. Trying to put these counts on a chart, let alone all the possible counts, not only clutters things up, but can distract from the rest of the data around us which is equally and or more important.
Bottom Line – this is likely a corrective sequence at this time. In the broader term we look at Elliott Wave cycles to gain perspective of the overall market cycle. It is important to understand Elliott Wave is far from a crystal ball especially in the short term. In the short term 10 analysts will likely come up with 10 counts. I could look at any short term EW TA count and find five other counts with both bullish and bearish scenarios. These are not dependable. This is why we look at price action and levels of importance in the shorter term inclusive of EW.
At this point let the market correction play out and we will look at the support levels shown for signs of a reversal and position accordingly but it appears that patience has paid off
The Contrarian view. from the SC post – A break of the 9696 level may result in a subsequent pullback to the lower 8k area, or the current major support zone
Since the 200 DMA often acts as a major support or resistance level, momentum could stall here and a pullback to the major support level is very possible. The area between 9340 and 10k has numerous overlapping resistance levels in both the short and mid term which could result in a sudden selloff and subsequent pullback. 9696 is almost a line in the sand here. This would only provide an opportunity for a swing or positional trade as a dip into these levels will likely be short lived.
The 9340, though important, was not my original level of focus. At that time my focus was on 9696 level or the original level we broke out of. I was looking to see if this resulted in a throwback. It did and since it failed to break back through we can consider this a “fakeout”. The next level to look at is the 9340 level where resistance now becomes support.
There is a higher probability that this is an extended wave B in a broader leg (4) corrective cycle then a continuation move. Since C waves often pullback to wave 4 of the current cycle it is very possible BTC pulls back to 7800 to 8400. This is why I mentioned a breakdown of the 9696 level may result in a pullback to the lower 8k support zone. A breakdown of 9340 at this point adds much to the probability we re-test the lower 8k range.
There was another count we were looking at that took us to 11k from here, but a break of 9500 negated this count. Keep in mind the broader count carries more weight and the shorter (fractal) counts which are based on short term noise. Trying to put these counts on a chart, let alone all the possible counts, not only clutters things up, but can distract from the rest of the data around us which is equally and or more important.
Bottom Line – this is likely a corrective sequence at this time. In the broader term we look at Elliott Wave cycles to gain perspective of the overall market cycle. It is important to understand Elliott Wave is far from a crystal ball especially in the short term. In the short term 10 analysts will likely come up with 10 counts. I could look at any short term EW TA count and find five other counts with both bullish and bearish scenarios. These are not dependable. This is why we look at price action and levels of importance in the shorter term inclusive of EW.
At this point let the market correction play out and we will look at the support levels shown for signs of a reversal and position accordingly but it appears that patience has paid off
