Good morning, traders. I hope you were paying attention to my analysis and/or live stream yesterday. The move through the swing low at $3934.73 set up a dive to $3753.85. In my update I mentioned that traders should be watching the $3750-$3800 level for support and during my live stream I said I wouldn't be surprised at all to see that hard push down toward that level. Many times, price returns to a triangle's apex, which is what happened. It is also the expected result of an alternate EW count that I have been looking at, which you have seen if you've been keeping up with my live streams. It means that we are likely still working on Wave 2, and this move down is part of the C wave as I've outlined in the H4 chart. Those that have been watching me know that I am not a big fan of using solely EW because it provides too much ambiguity in these corrective situations as we are currently seeing. If you are having difficulty accepting the fact that there has been no definitive directional movement for the past 2.5 weeks, then you probably shouldn't be trading at the moment. Remember, trading is speculation. Period. There are no guarantees but there is always risk. So you should be giving most of your attention to your risk management and looking for confirmations before entering trades. The idea is to eliminate as much risk as possible within your trading style and TF.
H4 chart:
This EW count has an ABCDE triangle as part of the B wave and this move down would potentially be the wave 3 of the C wave. I'm not convinced with the ABCDE, though, as I've mentioned before. While you can count ABC for each wave within it, you can also pretty easily count 1-5 in each. Volume is dropping with each successive candle which shows us that supply is exhausting at this time. We can also see that price is finding support on the ascending dashed red support line. RSI is sitting on oversold which means we could see a small bounce, but if the drop was wave 3, then we may still have a bit further to fall to fulfill wave 5 and complete the C wave. If it does, then my expectation is to see the EQ of the lower demand provide the bounce for wave 5. And if that happens, then we could be seeing a large ABCDE playing out on the D1, which I won't draw on here but will go over during this morning's live stream. Of course, we have seen some truncated fifth waves along the way here, so this could turn out the same and we would move up from this general area. The positive takeaway from all of this, if this is what it is, is that we would expect the next set of waves up to push through that overhead resistance. So far, this drop down has hit the 50% retracement of the beginning of the triangle to the recent high. Demand is increasing on the 15 minute as price prints a symmetrical triangle while hovering around the 15 minute S4 pivot. With RSI hitting oversold on this TF, supply appearing exhausted, price finding support on the S1 pivot, and demand building on the 15 minute TF, we may see a reversal via a "bart" and this becomes nothing more than liquidity generation as I suggested there was a good chance it would be during yesterday's live stream.
D1 chart:
RSI was rejected at resistance but remains above support, possibly printing another higher low, suggesting that price may be gearing up for another run at its major resistance that rejected it over night. We will have to wait until the end of the day to see how this TF closes. We can see that price hit the bottom of the red ascending channel that I drew on here the other day which is a good sign for now. Overall D1 volume and candle spread is still showing corrective rather than impulsive behavior at this time. As always, this can change, so traders should be sure they are paying attention to it. The pivot sits around $3690, and as long as price remains above that level then we are still bullish. It also means that price will remain above the 50% retracement. A close below it signals increased possibility of further downward momentum.
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.
Remember, 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.
H4 chart:
This EW count has an ABCDE triangle as part of the B wave and this move down would potentially be the wave 3 of the C wave. I'm not convinced with the ABCDE, though, as I've mentioned before. While you can count ABC for each wave within it, you can also pretty easily count 1-5 in each. Volume is dropping with each successive candle which shows us that supply is exhausting at this time. We can also see that price is finding support on the ascending dashed red support line. RSI is sitting on oversold which means we could see a small bounce, but if the drop was wave 3, then we may still have a bit further to fall to fulfill wave 5 and complete the C wave. If it does, then my expectation is to see the EQ of the lower demand provide the bounce for wave 5. And if that happens, then we could be seeing a large ABCDE playing out on the D1, which I won't draw on here but will go over during this morning's live stream. Of course, we have seen some truncated fifth waves along the way here, so this could turn out the same and we would move up from this general area. The positive takeaway from all of this, if this is what it is, is that we would expect the next set of waves up to push through that overhead resistance. So far, this drop down has hit the 50% retracement of the beginning of the triangle to the recent high. Demand is increasing on the 15 minute as price prints a symmetrical triangle while hovering around the 15 minute S4 pivot. With RSI hitting oversold on this TF, supply appearing exhausted, price finding support on the S1 pivot, and demand building on the 15 minute TF, we may see a reversal via a "bart" and this becomes nothing more than liquidity generation as I suggested there was a good chance it would be during yesterday's live stream.
D1 chart:
RSI was rejected at resistance but remains above support, possibly printing another higher low, suggesting that price may be gearing up for another run at its major resistance that rejected it over night. We will have to wait until the end of the day to see how this TF closes. We can see that price hit the bottom of the red ascending channel that I drew on here the other day which is a good sign for now. Overall D1 volume and candle spread is still showing corrective rather than impulsive behavior at this time. As always, this can change, so traders should be sure they are paying attention to it. The pivot sits around $3690, and as long as price remains above that level then we are still bullish. It also means that price will remain above the 50% retracement. A close below it signals increased possibility of further downward momentum.
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.
Remember, 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.