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Catching It’s breath

YM_Catching_ It's_Breath

One of the fascinating facets of Elliott wave studies is that it is paints a picture by numbers of the sentiment of investors in the market. With the realease of every new government report it seems to put in an actionary wave. The YM  chart above displays the characteristics of the impulse waves  to the downside.

Counting the waves of the news releases, you can see that the wave iii low coincided with the release of the existing home sales report released at 10:00 AM yesterday, but for some reason there  were bulls waiting at the skyline at 9970 looking for bargains and started the buying back up to the 38% retracement level until lunchtime at which time the bears were apparently hungry and started selling what the bulls had to offer.

The rest of the day it looks like they wanted to take and break and went outside for a game of volleyball. Perhaps deciding to wait to see what the Asian and European reports had to say overnite before making any more decisions.

Overnite, the YM continued it’s choppy sideways action. It is showing the results of the bad news from the Japanese market where the Nikeii fell to a new low for the year. With the realease of a modestly bullish report of Germany’s IFO report at 4:00 AM, the market bounced back up. However, the euphoria hasn’t lasted long and now has turned back down.

So the present question is are we in a wave iv triangle  with a new lower low with the release of the MBA report at 7 am (wave d)and then a bounce back up to a lower high (wave e) and then another selloff with the release of  the Durable Goods order report at 8:30 and then finish wave v with the new home sales report at 10:00.

We will be watching and counting.   Good luck and good trading.

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