Is the Market Correcting?
By David of All About Trends
We are not out of the woods yet BUT what we see is encouraging. Expect some backing and filling in here. By the same token, there is an alternative count to a 5 waves down count (red) and that alternative count is shown in the blue numbers in the chart below. Thus, if the blue count is correct, we could easily come back down to retest recent lows for the 5th wave of the alternative count.
Going into next week, we are waiting to see if we retest the lows. AAPL reports on Tuesday AFTER the close. If we rollover Monday and Tuesday (following the alternative, blue, count – don't fear it), we might retest the lows. AAPL could be a catalyst for popping the market off of that retest.
Our game plan for the week is:
Watch the 15-minute index charts for the potential of a retest of the recent lows per the Elliott Wave alternative count in blue. The S&P stopped going up Friday at the pink POH (pullback off high) downtrend resistance line .
Should we get a retest of the lows, we might start to see names stabilizing. We'd consider buying on the long-side watch list.
Take SODA for example:
Here we have a stock in a confirmed uptrend above the 50-day moving average that has pulled back off of its highs to hit support at the blue line and the 50-day mva. A break above the pink line would trigger a long-side trade.
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