Yesterday, S&P, Russell, NASDAQ broke support. Buying exhausted on Nov 13 with spectacular candle. I posted earlier that it has high probability to reverse the down trend. But it did not happen, subsequent days of selling has pushed the overall price to close below the low of Nov 13.
That lead to another interesting technical topic.
Elliott Wave, we should enter wave 5 on this downward move and will be looking forward to A-B-C once 5 is completed. However EW theory is very hard for me to use because it is difficult to see when the new wave is started or it was a continuation of the old wave. So it must be used on top of all other tools.
EW however is a reflection of human psychology, buying takes place then stock retraces to some level and buying resumes because it was at a point that people starting taking profit when buying stops.
After 3 legs up, stock usually consolidates in the A-B-C.
So we will see.
shorts:
longs:
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