Using an updated chart from last week, if you followed us you were warned of a bottom at 1343 and expected reaction towards 1375. Having used our pitchfork support and resistance lines, long positions were never endangered as prices broke through all resistances. As shown on the chart above, the upper pitchfork resistance which is also the outer limit of the downward channel, was reached and retested and finally broken. When trading, taking into serious consideration waves is as important for me as the resistance and support levels depicted by pitchforks and highs or lows. Although our main view was that 1375 was expected to be an important resistance were wave 4 would end, prices showed that our alternative scenario that the correction has ended was stronger than expected. Any short position opened in the area of 1375 should not have been held above 1389 and reversed as prices broke important resistance levels.
The 60 minute chart above depicts our main most possible wave count to date. The decline from September highs is not a clear impulsive wave. Even the decline from 1464 is not impulsive. If we don't see an impulsive wave of a large degree, then trend has not changed....Prices are moving impulsively from 1343 lows and as shown on the chart below, the 5 waves could already be complete. The decline from 1409 Friday's close is important which form will it take. Long positions should be considered between 1360-80 area as this could be a potential bottom for the correction. Stop level is 1343 so adjust risk management accordingly.
As always, thank you for taking the time to read my new post.
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