Yesterday we had written that a 38% retrace for a first wave down looked a little too cozy. It was. Prices rose today, and filled a gap on cash - which is quite common - and also filled a gap at 2,934.50 on futures. Persistent gaps in the futures (one that last for more than a few days) are a little rarer than on cash.
|SP500 Cash Index - 2 Hr - More than 50% Retrace|
Until there is more information, the probabilities have to be spread out evenly at 30-30-30 between these various scenarios.
- Second wave up as a,b,c
- Impulse up
- Larger triangle
The larger triangle arose from looking at the Dow Jones Industrial Average and noting that the down wave took less 'time' than the up wave, but did not make a new low.
You can read more on that comment at 12:33 PM in yesterday's thread. Here is the chart LINK so that you don't have to search for it. Any wave over 78.6% will be considered as part of an impulse up or as a leg of a triangle.
Right now we are counting upward. And as of the futures close a c wave would be greater in length than an a wave, which is really what tilts the probabilities.
Have a very good start to your evening.