Weekend UPDATE

While some are getting more near term bearish, I am in the opposite camp.  My favorite medium term swing indicators are showing quite a bit of positive divergence right now and I’m expecting a definitive end to primary wave [A] and the beginning of primary wave [B] within the next trading day or two (even a chance that it begins at the open on Monday).  Look at the indicators I’ve marked on the daily renko chart above.  These are just a small sample of many indicators that have built positive divergence during this wave (5).

A look at the 30 min chart above, you’ll see there are five countable waves down from intermediate wave (4), clearly these could be minor wave [i] of (v), but once again the positive divergence leads me to believe wave (5) is at or near completion.  I’ve placed a pink box on the chart above to represent my target zone for wave (v).

It could still reach my initial target of 1090ish via an ending diagonal, to complete the large bearish falling wedge (see daily chart above), or it could just make one small push and even truncate (end higher than the wave (3) low).

The FDX trade probably had too tight a stop on it too, it was stopped out at the close, but I have a feeling it’s about to pop.  The two remaining bear ETFs continue to rock up 14.83% on TZA and 11.42% on SDS!  This brings the returns to date up to an impressive 37.35%.  I’ve tightened my stops on those two trades, ready to take profits and not get too greedy.

About alphahorn

I received an MBA from Columbia University’s Graduate School of Business in New York and am a Wall Street veteran. I’ve worked for a number of investment banks including Smith Barney and First Boston/C S First Boston in New York. Over the years, I have developed my own Proprietary Swing System and I combine that System with my own Elliott Wave Analysis to trade.
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