I MAINTAIN THE CALL OF A SHORT-TERM PAUSE
Yesterday I mentioned that the "ending wave" of an EWP has to be impulsive or it must form an Ending Diagonal. At last, after completing a likely triangle (On Monday) we have an impulsive up leg in progress. This thrust, if my preferred count from the April 18 low is correct, is going to complete a Double Zig Zag.
Due to the EW reasons, which I have been discussing in the daily and weekly updates, I rule out that this up leg will complete the advance from the November lows. But this is not important now since, my preferred scenario will have to be ratified with a corrective pullback. What is valuable is that if you are long you should put a tight stop and if you want to play the short side a nice opportunity is coming.
I maintain what I mentioned yesterday: "Beforehand the confirmation that price has completed the up leg from the April 18 low and if the following pullback proves to be corrective I expect a move no lower than 1581"
If we zoom in with a 5 min chart we can see that after completing a Triangle price is unfolding an impulsive up leg, which is almost done. (Probably not higher than 1656.60)
I don't know if THEY will "pull the rug" ahead of next OPEX on Friday but usually a White Marubozu is followed by a small range body, therefore maybe the initial down leg of the expected pullback will begin on Thursday.
We do have three major warnings that are seriously suggesting that a short-term top is around the corner:
- Extremely low Equity Put/Call Ratio:
- TRIN is approaching the 0.50 line (Extremely short term overbought reading):
- VIX, as I suggested yesterday it is forming a bullish falling wedge, as well as a potential Double Bottom:
