Update: Wolfe Completes; Bulls Get Soft ... Bearly | #NASDAQ

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Last January 30th, we defined a few bearish targets during a rather long technical rant explaining our cautious bearish-toned analysis (See: Is Micro Soft? ... here: https://www.tradingview.com/v/lPZBswWg/). Therein, we warned against a few overhead resistance level , one of which was defined as "EAGLE", representing an (E)xtremely (AG)gressive (L)evel of (E)ntry opportunity for the counter-trend trader. Now that the market closed right at that level, it begs the question: What do we do?


Our predictive analysis has not changed a bit. In fact, with the recent price action, our analysis has defined further internal weakness as price continues to test that EAGLE range, adding to the probability of a reversal, which EAGLE is designed to offer to the counter-trend trader.


In addition to the prior analysis, I have added a few lines to define a completing Wolfe Waves Pattern. Typically, the Wolfe Waves Pattern, or "Wolfe Pattern", begins at a small impulse at Point-1 followed by a larger reactive Point-2 (which I find easily due to its isolated position it acquires for reacting so drastically after Point-1). Yet, at this point, it would be too difficult to discern for sure that the developing price action is drawing out a Wolfe Pattern, so look for the alignment of Points 1, 3, and 5, the latter being the departure point for the price action that will seek to reach Line 1-4. Indeed, Line 1-4 is the target the trader should seek to take profit after taking position from Point-5. In other more complex Wolfe Patterns, there are Points 5-prime and 5-second, written as 5' and 5", respectively, but this would be for another time.


Coupled with our own EAGLE and predictive analysis, we reached a point where we had to make this current technical note and keep you aware that we remain expectantly bearish . However, our directional signal has not produced any confirmation as far as bearish market reversal. Just increased weakness at the current level. So, once we receive an early market reversal signal form our more objective system (than our human sense), we will be sure to let you know, kind reader.

To recapitulate the prior analysis, we defined the pink zone as a probable level of resistance and potential reversal level. If price rallied above 38.98, further bearish expectation should be abandoned, and a new analysis would be required. If price did reversed from current level, we would still like to receive 1) an early market reversal signal, followed by 2) a market reversal confirmation signal before abandoning the thought of a possible bull threat.

I hope this finds you in a warm and cozy home, in good company with a peaceful weekend ahead.


David Alcindor
TradingView.com Moderator, Alias: 4xForecaster
Predictive Analysis & forecasting

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Disclaimer: Forecasts, analyses and directional opinions generated herein are for educational purposes only and are not trading recommendations. We trust that you will do your own due diligence first, then seek professional advice from a licensed professional, then enter the market at your own perils - David Alcindor - TradingView.com Alias: 4xForecaster

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