The speed and RSI says "Wait just one minute"
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So after thinking about it this weekend, a few things about Friday bother me.
1. The move was very fast and panicky, that's usually a sign that it's either a 3rd wave, or a C wave. A third wave would impulse in 5 waves, but so far it's been one large impulse down - more typically like a C wave. With the 4hr RSI being at it's lows again (see boxes) my guess is it's a C wave, implying a move higher than most expect after it's finished.
2. The head and shoulders neckline broke without any trouble and no backtest at all - very suspicious. Again, a 3rd wave impulse would see some kind of backtest of the obvious support level to create a 2nd wave - we didn't get that at all.
3. I'm suspicious of the head and shoulders pattern in general. Most times in this market a head and shoulders doesn't fail so easily. So is it really a head and shoulders? or just an A/B with the C starting Friday?
4. Some people are calling this a 5th wave down - improbable with the wave's speed and voracity. While I agree that it can be counted in 5 waves, Friday's "5th wave" does not have the characteristics of the previous 2 waves. 5th waves should be quite boring, 3rd waves (or C waves) should be the panicky or euphoric waves.
5. We should see institutional inflows of buying at the end of the month/beginning of next month. That's this week. I personally think institutions will do as they always do and buy. A 3rd wave or "crash" wouldn't support that idea.
In conclusion, I'm expecting a large, tradable bounce near the 4000 or 3950 area. Monday may get ugly, but by Tuesday or Wednesday BTD may rule the day again.
Technically and psychologically it makes the most sense to trick bears (and bulls - later in September) one more time before the larger move down.
I've been wrong before but I'm putting this out there as my primary idea. Good luck!
1. The move was very fast and panicky, that's usually a sign that it's either a 3rd wave, or a C wave. A third wave would impulse in 5 waves, but so far it's been one large impulse down - more typically like a C wave. With the 4hr RSI being at it's lows again (see boxes) my guess is it's a C wave, implying a move higher than most expect after it's finished.
2. The head and shoulders neckline broke without any trouble and no backtest at all - very suspicious. Again, a 3rd wave impulse would see some kind of backtest of the obvious support level to create a 2nd wave - we didn't get that at all.
3. I'm suspicious of the head and shoulders pattern in general. Most times in this market a head and shoulders doesn't fail so easily. So is it really a head and shoulders? or just an A/B with the C starting Friday?
4. Some people are calling this a 5th wave down - improbable with the wave's speed and voracity. While I agree that it can be counted in 5 waves, Friday's "5th wave" does not have the characteristics of the previous 2 waves. 5th waves should be quite boring, 3rd waves (or C waves) should be the panicky or euphoric waves.
5. We should see institutional inflows of buying at the end of the month/beginning of next month. That's this week. I personally think institutions will do as they always do and buy. A 3rd wave or "crash" wouldn't support that idea.
In conclusion, I'm expecting a large, tradable bounce near the 4000 or 3950 area. Monday may get ugly, but by Tuesday or Wednesday BTD may rule the day again.
Technically and psychologically it makes the most sense to trick bears (and bulls - later in September) one more time before the larger move down.
I've been wrong before but I'm putting this out there as my primary idea. Good luck!
Kommentar
50ma is at 4k as of friday's close, I think that likely is the area the market finds support. Kommentar
target area of 4k or 3950 likely tomorrow - ES futures 
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