In the last column, we discussed the multiple reasons to believe that the $760 area looked attractive as a buy. I urged anyone still short there to close their short positions. However, I cautioned that I was not yet ready to buy the chart, as it still felt like the correction had more to go both in terms of time and price.
It turned out that there was indeed a significant trading opportunity there. A decent jump for those able to get in and out at the right times. Here is a 2 hour chart:
We can see that the 1×2 Gann angle stopped the advance at the blue arrow. This precipitated a dramatic fall to $757. Price reversed exactly at the end of the 1st square, in time, at the red arrow. (End of squares often have such an effect on a chart.) There have been some large swings since then, with the top of the 2nd square stopping price on 2 occasions. As I am typing, top-of-square resistance is being tested again (yellow highlight).
So what’s next?
To state the conclusion first, I am still not convinced the correction is over. From an Elliott Wave perspective, I cannot see 5 waves up in that recent advance from $757 to $840. Can you? If not, then this bump is a corrective wave, not the start of a new advance.
But there is more than just that. Looking again at the chart above, price reversed at the end of the square, but not at a geometric position such as the top of a square or an arc. Price obliterated the 3rd arc pair, but did not test either the 4th arc, or the top of the next square. I cannot help but feel that pricetime will likely test the 4th arcs, and probably the 5th arcs as well, before this is finished. The green arrow identifies a possible target in the $700 area.
We will see…
Happy trading!
Remember: The author is a trader who is subject to all manner of error in judgement. Do your own research, and be prepared to take full responsibility for your own trades.
Image from Shutterstock.
