Yesterday we opined that we felt an upwave coming on. Come it did, with a vengance. But the damage is done in terms of the chart pattern. The solid break of the old low presages more down action — always and if the nearest wave high (that of November) is not taken out.
We theorized that Thursday’s low might be a bear trap. And we expected an upwave — not quite so quick and not quite so violent. (Friday — we neglected to consider that it was Friday.) But that is the nature of these markets. In trading markets canny traders buy weakness and sell strength. We think that is extremely difficult to do without watching the real time data and that’s too much like counting cards in smoky casinos for us. So now we begin the waiting game again — waiting to see whether it will be the high or the low taken out. We think that shorting the wave highs of the pattern is feasible (for a trader for a scalp) and as a speculation for a trender. Technically speaking, the fall of the panic low revalidates the downtrend.