At the backlink the chart had just broken down a H+S neckline and was back testing from below. I was not what you would characterize as bullish. In fact, quite the opposite even though EWI and AVI were both looking for higher highs. In fact I wrote, "If that neckline cannot hold, and after that gap down I do not think it
will be able to, it should lead to a further significant loss on the on
the $COMPX over the next week or two. That H+S neckline is now a
critical support/resistance trend line and my view is that further
negativity awaits."
In the current snapshot below we can see that my model and guidance were both quite good in this case. Nearly 500 nas compx points were lost during that time. Avi is thinking that was a 4th wave dip but EWI has gone negative and is looking for downside to accelerate very soon.
I suspect that both will be wrong. I do admit that this is a bit of a long shot call at this time but the sunset rollover is where I think this is likely going. A key component of this will be to break back up above the H+S neckline which the market will likely view as a breakout. Maybe it will even go up a bit higher than I have shown below and fill the gap at 5k. But then I think it hits the glass ceiling of a failed 5th and turns back down hard.
The picture below shows what I am thinking in a zoomed out way. The alternate path is in blue. I do not expect a higher high at this point because the economy just doesn't seem to be doing well and sooner or later that is going to show up in the chart.
If that up-sloping green line is smashed down though then it could get real ugly real fast because it will likely count as a 3rd of 3rd break down in that event.
No comments:
Post a Comment
Hi and welcome to my blog. Comments have been enabled for anyone with a google account.