Two counts here in the red and the blue, one with more downside than the other. The blue count would suggest a "buy the dip" scenario while the more bearish red count might suggest a more prolonged correction. Personally I am leaning towards the more bullish blue count. Of course, not included is a count that I haven't imagined yet and does something completely ...
So, I had this strange idea:
I took XIV (long volatility ETF) and divided its value by the corresponding value of QLD (x2 NAS100 ETF) to create this chart. To my knowledge the daily value of XIV is calculated based on the price of ES options, so there shouldn't be any relationship with QLD, yet this chart has a clear structure and beauty to it.
It's peculiar how ...
XIV could be due for a quick a violent correction if the pattern repeats itself.
Basically, the idea is that once XIV get stuck between resistance and rising moving averages, there is possibility for a puke.
Long @ 74.53
Stop remain at 96.96
Simple Trend-following Strategy
Direction: Long only
Entry Condition: Close below the open
Entry Rule: Buy Stop at Highest close of the last 2 days
Exit Price: Sell Stop at the Donchian Channel Low(20)