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Advanced Technical Analysis - XBD update



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.


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.

No positions in stocks mentioned.

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