Stock Market Drilling down to see what's going onStock-Markets / Stock Markets 2016 Mar 22, 2016 - 08:04 PM GMT
Sometimes it helps to “drill down” to a smaller scale to see if we may make some sense out of where this rally may be leading us. The first thing to check is the Wave relationships. Wave A = Wave C at 2027.60. At this point, Wave C is 121% the size of A.
We drill down a little further and find that Wave [iii] is 107% the size of Wave [i]. Wave [iii] times 1.07 equals a target of 2052.18 for Wave [v]. That is why it is easy to mistake Wave b of (iv), which happened near yesterday’s close, as the probable top. It wasn’t, but now we appear to be getting closer in our calculation of the size of this rally. Let’s go a step further.
A 10-minute chart appears to be even more instructive. All of the Micro Waves appear to have an a-b-c construction. Wave v appears to be complete, as well. In this case, Wave iii is undoubtedly the largest wave, so we look for equality between Waves i and v. In this case, Wave v equals Wave I at 2054.40. As usual, Wave v overshot its target, but we have seen this before.
This 3-way check in a corrective rally can be helpful. Is it 100% accurate? No. Alternate patterns may interfere. However, should SPX decline back beneath 2040.00, we have a much higher probability of being correct.
VIX is revisiting its low again at 13.75. It is being sold against the rally in SPX.
TNX went higher today at 19.26 against yesterday’s high of 19.24. Today is a Primary Cycle Pivot, so that may explain the additional 1-day wait for the decline to resume. This could be interesting.
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