11 July 2014

There is a possible new development, but more on that in a bit.  Lets talk about what happened today and the past few days that transpired. Today's action did not do much for markets, and it appears on the 60min chart that prices are testing the underside of the lower channel line I spoke of a few days ago as being a line the bears need to cross to sustain more down pressure. (refer to 60min chart below in green dotted line).  The Bears line has now shifted from that lower trend-line to the low made on July 10th.  This is also the approx. 200ma of the 60min chart.  Therefore a break needs to be made next week below the low I just mentioned or the bulls can carry the consolidating pattern to new highs.

I know for some cycle analyst, that the top is in and for some, that a CIT had occurred.  I am not willing to bet the farm on these setups where there are possible doubts or holes that cannot be explained.  Until then the indicator is still my main concentration, and thus far is on a downward bias.  Anything can happen over the weekend so be on your toes.

You will notice on the 60min chart that there is a reaction near the 15th of July (Red highlighted vertical bar), but this could stretch to the 24th.  The possibilities of an acceleration up within the next week has great potential.  So again, the low made on July 10th is critical in my views.

The triangular scenario in (blue dotted line) is the new development I would like to talk about now, and it has merit.  Near the beginning of the week I mentioned that I could have counted the rise up to new highs the wrong way or that it is in fact a corrective pattern due to it falling short of completing a full wave structure.  It now dawned on me that the rise up could potentially be "corrective", and is a 3 wave structure but just not evident to the naked eye (see July 8th post).  Because we are counting in a intra-day or sub-wave level, one can get lost in the up-ticks and down-ticks of the prices.  We do however still need to keep an eye on it as a possibility if one is short the market.  If we do rise next week to touch the upper trend line of the blue dotted line triangle, we could also be setting up bears for a fake head and shoulder, thus I warn of the potential break of the high made on the 9th of July as critical for Bulls to break to keep the ongoing pattern a consolidating corrective pattern (See 15min chart).

Ok.. So now that I have confused you, we can try to mull it over the weekend. lol.

MT: DOWN
ST: DOWN
PA: NA

15min:

60min:

Note:  I have always tried to forecast an Elliott Wave Pattern before it is evident, and sometimes it happens because we keep an open mind.  Sometimes, once the pattern or count is evident, it could also back fire because too many see it as such.  Elliott Wave is hard enough to count, but it is great when you are able to anticipate its move and that's what makes wave counting exciting.  Would I say it is accurate?  The odds are against you is all I have to say...  So the important takeaway from this is the July 9th high and the July 10th low.  These are the range to break for both bulls and bears.