The comparison of the two corrections is very similar. In September the trend changed and we formed a new . Obviously at that time we could not have known that, but as we obtain more data the trend became clear. Currently that trend is still in tact. It has been tested but any test has been bought up quickly. So bottom line as much as I want an $11,000 correction to happen, and though it still can happen, I do not see any evidence to support it. You can do to the cows come home, but sometimes the most simple things, like , are the best guides for positioning. I can show you fibb retracements, EW wave counts, ABCDE , triangles, that all show us going lower, but these are assumptions. This is why corrections are difficult to trade and is not a crystal ball but a guide. What did we base our assumption on? The prevailing trend. Now this is completely different from Septembers correction where we never reverted back to the prevailing . We started a new and from that point it is still in tact.
So why did I enter so early after the correction when normally I am a tight trader and conservative investor? Simple buyers bought the dip quickly pushing us back into the previous consolidation channel. I was willing to buy a 1/3 position at $14,740 as the previous dips at the were short lived (see below) . My stop loss zone would be below the which is a now lower than my entry level. often become resistance after breaking support so I believe it was a low risk entry as I would have opportunity to exit with minimal loss and still be up overall. Playing with house money so to speak.
Regardless of the the numerous TA's calling for 11k or as low as 5k. Please show me some evidence more than an assumptive pattern and a call that we have come to far to fast? I'm not saying we won't correct, so do not get me wrong, but where is the evidence we will? I will provide my evidence for a continuation.
#1 - Prevailing trend has NOT been broken.
#2 - All dips into the see buyers rush in
#3 - NOT one 4 hour bar closed below the
#4 - We made a HIGHER HIGH and an HIGHER LOW
#5 - We are CONSOLIDATING at where we would expect for another run.
Now the Bear evidence
#1 - We NEED to break the where support become resistance (assumptive till it happens)
Now sure someone can throw up and EW count, Fibb retracements, , Triangles etc, and provide a that may or may not develop, but I can do the same for a as well. This is why I will say it again, corrections are difficult to trade!
Bottom line, many times TA's over analyze charts, and fail to look at the most important thing. THE TREND! Until that is broken I am . I'm looking to add to the position out of the two consolidation boxes shown.