The song remains the same. Although the longer term outlook from an Elliott Wave standpoint remains bullish in any case, we've been trying to answer the question of whether or not we've completed all of larger degree wave 4, so that the longer term bullish trend can resume, or if we need a deeper wave 4 drop before the trend resumes. That question is still the most important one, although we have more recent market action to guide us, so we know what to look out for.
Over the last several weeks, we've traced out a pattern that can be interpreted as bullish or bearish (in the shorter term) with almost equal probability. "Almost equal" because the short term bearish case is being pushed to its limits, so the probabilities continue to support a slightly more likely immediately bullish case - a direct route up from where we are now.
On the chart above, I present the more bullish case. Although the spike up today can can be seen as a classic triangle breakout, it also has the makings of a lower degree wave 3. As I write this, we are approaching the same key multiple resistance area I pointed out a few weeks ago - where we failed to overcome resistance on the first attempt. How things play out immediately from here will be revealing.
To sway the probabilities further toward the immediately bullish case, we first need to see a break above 603. If we can break 603, the next resistance test will be in the 637 area. A convincing break of 637-640, in a clear impulsive structure will seriously damage the immediately bearish case - until then, it's still on the table as a possibility. I'll post the bearish alternative count in the comments below.
If we fail to break 603 on this next attempt, however, the weight of the probabilities will shift in favor of the bears.
So, we continue to track the patterns...and we wait until the probabilities are strongly in our favor to add to or take on a new long term position. The market will eventually tip its hand. They always do eventually.
Over the last several weeks, we've traced out a pattern that can be interpreted as bullish or bearish (in the shorter term) with almost equal probability. "Almost equal" because the short term bearish case is being pushed to its limits, so the probabilities continue to support a slightly more likely immediately bullish case - a direct route up from where we are now.
On the chart above, I present the more bullish case. Although the spike up today can can be seen as a classic triangle breakout, it also has the makings of a lower degree wave 3. As I write this, we are approaching the same key multiple resistance area I pointed out a few weeks ago - where we failed to overcome resistance on the first attempt. How things play out immediately from here will be revealing.
To sway the probabilities further toward the immediately bullish case, we first need to see a break above 603. If we can break 603, the next resistance test will be in the 637 area. A convincing break of 637-640, in a clear impulsive structure will seriously damage the immediately bearish case - until then, it's still on the table as a possibility. I'll post the bearish alternative count in the comments below.
If we fail to break 603 on this next attempt, however, the weight of the probabilities will shift in favor of the bears.
So, we continue to track the patterns...and we wait until the probabilities are strongly in our favor to add to or take on a new long term position. The market will eventually tip its hand. They always do eventually.
