Yesterday I stated that we are most likely on an ABC pattern with the C-wave commencing. This impulsive manner confirmed our forecast for an impulsive move, but that pretty much where all the similarities lie. Today by the end of the day, prices have dramatically regressed and also made an impulsive move. One that we could call the 1st sub-wave of a 5th or a 3rd wave primary. While all these counts meshes with the movement of price. I could also add another count that has us still in a corrective push. This is the problem of EW. So while our indicators are bearish, EW theory suggest that we might also get a pattern that is sub-dividing causing today's regression as a c-wave of a sub wave b. Confused already? Well, it doesn't mean our count yesterday was wrong, but we have to keep options open for a corrective pattern that is not done. A lower low from the last crash low would confirm that a 5th or 3rd wave primary was at hand, but it would be too late.
So what to do? Indicators, that's what works and that's what we promote here on this site. The impulsive reversal will definitely do damage to the ST and should turn the ST to the downside tomorrow, unless we get another reversal to the upside. With the intra-day looking bearish a small position could be initiated on the speculation of more bearish move. However, one must be cautious with the ST still being in an up trend. The risk is still to the bearish conditions but we do not need to be chasing price before confirmation.
SEN: Bearish
ST: UP
PA: NA
The counts are getting crowded, but the option I did not present yesterday was the (blue a-b-c) count which could count as a sub-wave.
Nothing to fear on a bearish sentiment if you are on the right side of the trade / trend. Yesterday we also discussed the implication of the 20 day MA and the 75 MA on the 60 min. chart. Both of which caused a resistance and support breakdown.
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