According to plan

February 22, 2016 08:50 AM

We have a really good formed low against a time window on the hourly chart. Most of the time it will mean the low pivot will be dominant.

There is a chance the rally could be over because after all this is a brutal bear you don’t mess with, it has to be the lower probability. Right now the SOX represents a move to the gap down of important resistance, which is the last leg to the bottom. This is the most logical technical place on the chart for profit taking and a stall of the rally. Yes it is a stall, but not likely the top.

Here’s how I’m looking at this condition. In normal years—which means years other than 2015—Santa rallies are usually intense, but inside the intensity there always seems to be several days to a week where the market does nothing or gets hit severely. In Elliott terms, that would be a correction (either sharp or flat). Let’s just say it takes a week off. Yeah, I know this isn’t Christmas, but that’s not the point.

The point is this: we’ve had an intense start to this rebound very similar to what you’d get in a Christmas rally. But think back to all those rallies with a time limit of 3-4 weeks. They usually form a baloney sandwich, where the rally weeks are the bread and the pullback is the baloney.

We could have a baloney week right here. This rally, which started perfectly at the time calculations just mentioned, has a track to work its way to the seasonal point. This is also the Gann Master Timing window around March 20, and these charts do have a way of not going straight up or down.

Now if it kept going at the pace it was at, we could be on the moon by March 20 and I don’t think that will happen. Consequently, I think we are in the counter-trend move of the counter-trend move of the counter-trend move. Are you confused?

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About the Author

Jeff Greenblatt is the author of Breakthrough Strategies For Predicting Any Market, editor of the Fibonacci Forecaster, director of Lucas Wave International, LLC. and a private trader for the past eight years.