Today’s resumed major bull trend above 12-Feb’s 87.25 high leaves 18-Feb’s 83.62 low in its wake as the latest smaller-degree corrective low it now must sustain gains above to maintain a more immediate bullish count and the risk/reward merits of a still-advised bullish policy “up here” in the massive SIX YEAR lateral range’s upper-quarter. Against the backdrop of the major bull trend, this 83.62 low is admittedly very tight for a longer-term risk parameter. But even longer-term commercial players are advised to use this level as a risk parameter because of virtually no levels of any technical merit below it due to the extent and uninterrupted nature of Feb’s portion of the bull.
A failure below 83.62 would arguably be just a slightly larger-degree 4th-Wave correction within the broader bull that would have an eventual 5th-wave resumption of the bull to complete the sequence up from 20-Nov’s 65.92 low. The major problem and risk to this line of thinking is 1) it RELIES and Elliott “theory” and 2) even if we had divine intervention that informed us it was a 4th-wave, there’s no way to know how deep the correction could run. And with historically stratospheric bullish sentiment levels and the market’s position in the upper-quarter of the massive six year lateral range, such a sub-83.62 failure would simply pose too great a threat to the bull to maintain a bullish policy.
The weekly (above) and monthly (below) log scale charts show the market’s position in the upper-quarter of its massive six year lateral range that has repelled all four previous assaults dating from the summer of 2016. These charts also show understandably historically frothy bullish sentiment/contrary opinion levels that have warned of and accompanied every major peak and reversal this market has seen. But neither of these facts mean anything until and unless the clear and present and major uptrend is broken. Herein lies the potentially vital importance of last week’s 83.62 low and risk parameter. Until the market proves sub-83.62 weakness, the trend remains our friend indeed. And the market’s remaining upside potential s indeterminable and potentially extreme.
These issues considered, a full and aggressive bullish policy and exposure remain advised with a failure below 83.62 required to defer or threaten this call enough for even longer-term commercial players to take profits and step aside. In lieu of such sub-83.62 weakness is proven, further and possibly accelerated gains remain expected.