On March 30th we showed the significance of the daily candle trading outside the upper Bollinger Band. We found -going back to the beginning of the recent bull market- that “all set ups have price down after such a candle within a matter of days using the current market .” Now 7 trading days later and price closed already 4 times below that day’s level, including last Friday, which again saw a close below the COMPQ’s 200d SMA. Hence, the study so far provided to be accurate and reliable: not much price progress if any at all since that candle.
Moving forward, and looking into more detail, we continue to be unable to assign a bullish (none-overlapping) wave count to the Techies: NDX and COMPQ. In fact, we first mentioned this a month ago: see here. Since then the market has done nothing to disprove this count and has in fact only advanced 175p on the NDX: 4%…
The chart below shows the COMPQ and the bearish (overlapping) count we continue to track. What we can observe is that at Wednesday’s high an almost perfect (red) intermediate c=1.50x a relationship was hit. In addition, the intermediate wave consists of 3 (green) minor waves; abc, and the c=a relationship also targeted exactly that same price level.
What we then observe is price finding support at the $4840-ish level. Using the maximum width of the red box, a break/close below that level targets $4740. No coincidence, as that’s where strong S/R resides (horizontal green line). Translated to the SPX, this targets SPX2000; perfectly within the ideal first target zone for the current wave down, which was already outlined to our premium members last week.
As you notice, Intelligent Investing tracks many lines of evidence to determine the market’s next big move, Elliot Wave, S/R, TIs and TAs are several of them. Holistic objective analysis allows us to be on the right side of the market more often than not, without any preconceived notion or opinion. We use just the facts. Just like we did here! Do you want to be on the right side too? Of course! Then please join us here.