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Advanced Technical Analysis - XBD update

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Note: the following analysis is formulated as an assimilation of Fibonacci, DeMark, Elliott Wave and other technical indicators. It is offered as education and not intended as advice in any way.

Summary:


I am updating my XBD note from Tuesday with an important change in the very short term analysis. Nothing about the long term analysis has changed: I still believe that prices are likely headed to the 110-112 area before a very good bottom could be seen that results in a multi-week/month rally to 125-135 before the index could possibly begin a downtrend.

The short term however, has changed: specifically, I am now looking for prices to complete the triangle formation that has been forming from the 7/21 peaks with a final upward thrust to 124 +/- in a corrective wave 4 bounce. My last note suggested that this triangle formation could result in a downward thrust to 110-112. Based on the price action over the last several sessions, I now believe that the triangle is a B wave of the entire ABC wave IV pattern. As a result, the most probable scenario in my opinion is for a thrust upward in the next few sessions to complete the wave IV corrective bounce off the 7/19 lows. Once complete, this wave IV could result in a final impulse move lower toward 110-112 in the 5th wave off the February peak.

As a result of this triangle pattern, the analysis suggests there are a few possible setups. (1) In the short-term there could be a possible move upward from the 117.75-118.25 area, unless levels decline through 116. (2) A decline from the 123.75-124.25 area to around 110-112 could then result unless levels continue to rise through 127. (3) Should those levels be reached in the 110-112 area, an uptrend could begin toward the 125-135 level. Of course this is not intended as advice, but just my educational analysis and opinion.

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