Since the movements of the herd are not 100% predictable (not even close in general) in advance, a good EW trader must, must, must step away from a chart and then come back looking for the opposite behavior. Predisposition to rally or sell off can blind the brain's pattern matcher to the reality of the odds.
In case this sounds an awful lot like "hey, stocks can go up or down don't you know...", the reason for it is that after certain trigger points trip the odds change. For example, after today's massive 20+% run in JNUG I decided to sell into the extended trade based on the FEAR that we just got a WCC of HT4 per below. In other words, while my primary model is in red, the herd has left itself every justification to reverse right now and then target a lower low after tracing out a HT. Given that my primary goal is to preserve what I have, I've decided to move all of my risk into the lost opportunity camp and out of the lost capital camp. I won't stay here for long if overhead resistance doesn't hold but for overnight I'm in cash.
If the current move up from the Sept lows didn't count like a rising wedge, I wouldn't be so quick to sell right here. But right now we could not make a higher high even though we just had a 20% move. Generally I like to see big moves smash resistance, not terminate right at the front door of resistance.
Also note that this wave could not yet reach into the range of red 1. IFF it does, at the point circled in cyan, that is a very bullish sign IMO.
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