Elliott Wave: Week of 1/22/19 - Hey, where's my re-test?
Seems like just about everyone is awaiting or predicting a re-test of the December 2018 low. Bulls and Bears alike look to history and high frequency of re-testing prior support or resistance. Bulls are looking for a second chance to buy lower in anticipation of further advance. Bears are convinced further declines are ahead despite the current rally's strength. What do you expect?
This week's chart builds on last week's, but with a closer look at the current advance. The higher degree A,B,C illustration is replaced with closer emphasis on wave B using granular detail shown as a,b,c. A new arrow (red) has been added to represent subsequent wave C. Targets for a and b are set at familiar Fibonacci levels (left side). Note how b and c are set near earlier support/resistance levels, namely 2532/2508 for Feb 2018 and 2800/2815 for Oct/Nov 2018, respectively. With that illustration in mind the question remains: Where's my re-test!!!?
Three yellow arrows have been added for reasonable consideration. At present Bears would be foolish to position for decline until after the present upward thrust concludes. Those opportunities are at downward facing arrows near a and c, but not until after downward direction is confirmed. Positioning (short) at those points with stops just above eventual peak provide for lower risk and potential gain. Likewise, any pullback to b ending with upward movement allows for positioning (long) with stops just below the eventual bottom.
Ok, but you may still ask: Where's my re-test? IMO almost everyone is looking for the wrong re-test of the December low. The re-test of the HIGH (Sep 2018) is where attention should be placed. Right now my assessment is that re-test will fail (as wave C), even if it briefly revisits slightly above the 200d sma. However, I'm prepared to be humbled (market has a funny way of doing that to us) and any successful re-test of that high will provide ample opportunity for what follows.
I suggest a plan to "Look out ABOVE" and stop looking down for now.
This week's chart builds on last week's, but with a closer look at the current advance. The higher degree A,B,C illustration is replaced with closer emphasis on wave B using granular detail shown as a,b,c. A new arrow (red) has been added to represent subsequent wave C. Targets for a and b are set at familiar Fibonacci levels (left side). Note how b and c are set near earlier support/resistance levels, namely 2532/2508 for Feb 2018 and 2800/2815 for Oct/Nov 2018, respectively. With that illustration in mind the question remains: Where's my re-test!!!?
Three yellow arrows have been added for reasonable consideration. At present Bears would be foolish to position for decline until after the present upward thrust concludes. Those opportunities are at downward facing arrows near a and c, but not until after downward direction is confirmed. Positioning (short) at those points with stops just above eventual peak provide for lower risk and potential gain. Likewise, any pullback to b ending with upward movement allows for positioning (long) with stops just below the eventual bottom.
Ok, but you may still ask: Where's my re-test? IMO almost everyone is looking for the wrong re-test of the December low. The re-test of the HIGH (Sep 2018) is where attention should be placed. Right now my assessment is that re-test will fail (as wave C), even if it briefly revisits slightly above the 200d sma. However, I'm prepared to be humbled (market has a funny way of doing that to us) and any successful re-test of that high will provide ample opportunity for what follows.
I suggest a plan to "Look out ABOVE" and stop looking down for now.