The market’s recovery this morning above last Wed’s 3320 minor corrective high and short-term but key risk parameter discussed in Thur’s Technical Webcast confirms a bullish divergence in short-term momentum. This admittedly short-term but crucial momentum failure defines Thur’s 3198 low as the end of at least the portion of this month’s downtrend from 16-Sep’s 3420 high and possibly the end of a 3-wave and thus (bull market) correction down from 02-Sep’s 3587 high. Per such and despite it’s arguable short-term nature, we believe Thur’s 3198 is now and key risk parameter from which a bullish policy and exposure can be objectively managed by both short-term traders and long-term investors alike.
Despite the short-term nature of this morning’s bullish divergence in momentum, it stems from a 3398 low that was just spittin’ distance from 24-Jul’s 3191 corrective low we had as our key long-term risk parameter around which we have been negotiating a correction-vs-reversal dilemma and challenge. This specific 3198 level was a larger-degree corrective low that was/is the first larger-degree corrective low just below a ton of former resistance ranging from 20Feb20’s 3398 high to 08-Jun’s 3231 high that, since broken by Aug-Sep’s rally, would be expected to hold as new support per any broader bullish count. By virtue of today’s proof of at least intermediate-term weakness, we can identify Thur’s 3198 low as one of developing and possibly crucial importance.
A relapse now below 3198 doesn’t necessarily mean subsequent weakness below 3191 ahead of major downside potential thereafter. But today’s recovery does contribute another key data point at 3198 that’s amidst a number of key data points in this area that we believe should/must hold IF this month’s sell-off attempt is another mere correction within the secular bull market.
CLEARLY, we cannot conclude a resumption of the secular bull to new all-time highs above 3587 from just a short-term mo failure above 3320. But what we believe we CAN glean from the past couple days’ recovery is the importance of Thur’s 3198 low as a pivotal level and condition around which directional biases and exposure can be objectively toggled and managed.
These issues considered, shorter-term traders with tighter risk profiles have been advised to neutralize bearish exposure as a result of this morning’s recovery above 3320 and are further advised to first approach setback attempts to 3285 OB as corrective buying opportunities with a failure below 3198 required to negate this call and warrant its cover. A bullish policy and exposure remain advised for long-term players with a failure below 3198 required to negate this call and warrant its immediate cover ahead of a resurrected peak/reversal count that could then expose potentially protracted losses thereafter. In lieu of such sub-3198 weakness, further and possibly accelerated gains should not surprise.
