SPX Searching for more Downside
Hey Guys
Looks like we are at the start of wave 3 down.
The Corrective Move
The ABC correction is in place, with a nice triangle forming for a breakout to leg C.
Contracting triangles are quite common in B waves.
We need a clean break to the downside for leg C of the correction (Below 2860)
This set up looks good for a short and gives impetus to the bearish rising wedge setup we've seen breakdown over the last couple of weeks.
Using the Heikin Ashi candles, the path of the wave movements becomes clearer.
Wave 2's movements were spot on if you look at the lower degree.
The Lower Degree Move
Wave (2) was a sharp retrace to the 50% fib, followed by an extended (3) to the 1,618 fib.
Then came a flatter move sideways on (4) on par with the alternation rule of corrective waves.
Finally wave (5) ended at the higher degree's 61.8% retracement level.
Almost perfect for a short setup and another leg down.
The Higher Degree
Wave 3's target could be all the way at the bottom or further, around 2000, only time will tell in this case.
Fundamental
Quick reopening of the economy
Lack of ideal testing
Still increasing deaths and cases
A catalyst for the next wave downwards will most likely be, a second lockdown, more companies providing lower guidance or a slow down of the Fed's QE infinity.
Lets see how this pans out, either way it will be interesting in the weeks to come.
Good luck and stay safe out there.
The OnyxTrader
Looks like we are at the start of wave 3 down.
The Corrective Move
The ABC correction is in place, with a nice triangle forming for a breakout to leg C.
Contracting triangles are quite common in B waves.
We need a clean break to the downside for leg C of the correction (Below 2860)
This set up looks good for a short and gives impetus to the bearish rising wedge setup we've seen breakdown over the last couple of weeks.
Using the Heikin Ashi candles, the path of the wave movements becomes clearer.
Wave 2's movements were spot on if you look at the lower degree.
The Lower Degree Move
Wave (2) was a sharp retrace to the 50% fib, followed by an extended (3) to the 1,618 fib.
Then came a flatter move sideways on (4) on par with the alternation rule of corrective waves.
Finally wave (5) ended at the higher degree's 61.8% retracement level.
Almost perfect for a short setup and another leg down.
The Higher Degree
Wave 3's target could be all the way at the bottom or further, around 2000, only time will tell in this case.
Fundamental
Quick reopening of the economy
Lack of ideal testing
Still increasing deaths and cases
A catalyst for the next wave downwards will most likely be, a second lockdown, more companies providing lower guidance or a slow down of the Fed's QE infinity.
Lets see how this pans out, either way it will be interesting in the weeks to come.
Good luck and stay safe out there.
The OnyxTrader
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