The anticipated pullback was on schedule, but leaves me uncomfortable for a couple of reasons. Path is still on course for new highs. Now what?
My discomfort is with determining whether to position for pullback when I expect the main trend is up for my overall position. The initial downward move was favorable to me for a trade, and I'll likely not press my luck vs simply waiting for the next ride up to stay with the main trend. I'll sit and wait, and even welcome a further pullback to the 2755 area, a level that has several data points drawing this week's attention (see note in chart).
My further discomfort is with evaluating the pullback's magnitude. At this point a slightly larger pullback is due vs what we've seen thus far, making 2755 a very near term probability and my likely scenario. I'd welcome that for trade entry with trend's upward movement later, but wouldn't be disappointed to see the current advance go beyond 2848 (close) to suggest all is clear.
Separately, I've really been able to commit time and energy to longer term assessment and review of wave/trend expectations. It is those estimates that will drive near term perspective using overall circumstances within broader historic context. In short, we go up first (wave 5) with significant challenges ahead. It is way too soon to worry about those challenges at the moment. However, it is those same factors that indicate the current pullback has been too shallow at this juncture for this lower degree wave 5 movement.
Trade closed: stop reached
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Monday's move beyond 2848.03 invalidates any anticipation of further decline.
Thank you for your feedback .... I value your opinion very much and read your notes every weekend .... I am looking to get a short position on the SPY but I believe the SPY would want to touch the Jan ATH 286 before a pullback .... are you of the same thoughts ? If yes, what level should this be negated on the SPX ? Meaning, that it will go up and breakout above 286 on the SPY.... thank you
iamthewolf
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@traderhr77, thanks for following. see my comment below to @The_Unwind for my perspective on near term possibilities. Keep in consideration your circumstances and time period of expectation. atb.
The_Unwind
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So exactly what are you saying ?
The difficulty I have with Elliot Wave analysts, is that their interpretations are often
on both side of the trade, meaning preferred and alternate, two counts going on at the same time.
And because of that they are often "right", but price has moved substantially in the meantime,
before their analysis becomes clear
THE_UNWIND
iamthewolf
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@The_Unwind, Exactly what I'm saying is I use probability. I can use certainty, but I'll also admit I'm wrong when I am. So you decide on whether to follow along, or not. I always have an alternate, and open mind, but generally state only the primary read.
If you look at my charts I very seldom, if ever, state my alternate position "both side of the trade." In fact, I've been consistent about wave 5 for months, and that is the main trend. There weren't many saying that back in February.
As for the immediate term, my highest probability is the pullback is not complete and we'll see 2755 area first. It looks like only a and b of abc are done. I don't like that setup, or the small % decline at this juncture, for an IMMEDIATE trade and will let the market tell me more. For example, if we open higher Monday and don't close above the 7/25 high of 2848.03 I'll increase the probability, and may take a short position. I'd also use a stop just above 2848.03 to manage risk. If we go higher then the pullback is over, I'm wrong, and I'll look for new highs sooner. My comfort zone is being on the long side of an uptrend in progress. I'm not in/out daily and prefer more of a swing trade approach for short term use.
This pullback is a very minor event IMO and I prefer not to fight the upward trend.