Yesterday’s break below last week’s 744.3 low reaffirms our bearish count introduced in 07-Sep’s Technical Webcast and leaves 14-Sep’s 767.5 high in its wake as the latest smaller-degree corrective high this market is now required to sustain losses below to maintain a more immediate bearish count. Its failure to do so will confirm a bullish divergence in short-term momentum, complete a 5-wave Elliott sequence down from 29-Aug’s 821.0 high and expose at least a corrective rebuttal to this portion of the broader sell-off attempt from 19-Jul’s 854.8 high. Per such, we’re defining 767.5 as our new short-term parameter from which the risk of a still-advised bearish policy and exposure can be objectively rebased and managed by shorter-term traders with tighter risk profiles.
This tighter but objective short-term bear risk parameter at 767.5 will help us to more acutely navigate the challenge of discerning the broader sell-off attempt from 19-Jul’s 854.8 high as a mere 3-wave BULL market correction OR a major reversal lower. Indeed, by breaking 11-Aug’s 757.5 low last week, we can conclude that the resumed decline from 29-Aug’s 821.0 high is either the completing C-Wave of a considerable bull market correction ahead of a resumption of May-Jul’s impressive rally OR the dramatic 3rd-Wave of a reversal lower that could culminate in a resumption of 2022 – 2023’s secular bear market to new lows below 31-May’s 628.9 low shown in the weekly active-continuation chart below.
Commensurately larger-degree strength above 29-Aug’s 821.0 larger-degree corrective high remains required to confirm Jul-Sep’s decline as a 3-wave and thus corrective affair, and that 821.0 high would be the next key threshold IF the market confirms a bullish divergence in short-term momentum above 767.5. What the market might have in store for us between 767.5 and 821.0 is anyone’s guess, so the technical and trading matter of SCALE will become paramount IF/when the market recoups 767.5. Certainly, shorter-term traders would be urged to neutralize bearish exposure on a recovery above 767.5. Longer-term commercial players would have the option of either incurring longer-term bear risk to 821.0 or acknowledging and accepting whipsaw risk back below whatever ow is left in the wake of a 767.5+ recovery in exchange for much steeper nominal risk above 821.0. Until and unless the market recovers above at least 767.5 however, at least the intermediate-term trend and possibly the long-term trend remains down and should not surprise by its continuance or acceleration straight away.
These issues considered, a bearish policy and exposure remain advised with a recovery above 767.5 required to defer or threaten this call enough for both short- and longer-term players to pare or neutralize bearish exposure commensurate with their personal risk profiles.
