From May 1 to June 4, Mid Cap traced a perfect 5 waves down, or was it only three waves down?, that’s the thing with those patterns, you recognize them when they are finished. Something like that happened beginning this year, most of us where expecting a change of trend but the market kept going up. Well, that was then and this is now.
If the movement from 530.07 to 462.84 is a 5 wave down, the upward retracement should be ending soon. Mid Cap presents an almost perfect zig-zag from June 4 to yesterday. Now, I am not expert in Elliot Theory but one would say that a retracement should take less time than the main direction wave.
From May 1 to June 4 we have 35 days, from June 4 to yesterday is an 83% retracement in time, to July 9 there will be 35 days.
Basic Materials weaker.
Financials a little bit stronger.
And then we have the Russell with its 88% retracement in points.
I shorted the Russell at the close yesterday; target is at 1% down, stop at 0.76% up, for a day or two at last.
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