As we mentioned Friday, the highest probability scenario we foresaw was some sideways consolidation for the day to move across that channel and give another late-entry short opportunity. If the chart does play out as we foresee, we should experience one final down-move to finish off the initial formation of this downtrend.
Once that move is complete at least several days of recovery will be in order, that should probably take the down up to about a 1/3 - 50% retracement of this leg-down.
One thing of note is that the channel we have drawn seems to be of some importance in psychological measurement, as the Dow gapped up through the primary lower channel line and did not come down to fill the gap until after the channel had descended below the precious day's close. This should offer us a good guide as to the next and potentially final drop in price that will complete the first move of this broader bear market decline.
Enjoy your trading day everyone!
Derek.
Posts
Hi Derek,
ReplyDeleteThanks for your excellent views. Do you have some recommendations on suitable options to play the downtrend in stocks and Gold and the appropriate price points?
Thanks,
Ajay
Unfortunately at this time we are refraining from listing any more of our specific positions - we will be offering a subscriber-only service in the very near future as well as a completely revamped site with constantly updated trader's resources as well as a bi-monthly publication for subscribers.
ReplyDeleteThanks for the inquiry, and all the best!
Derek.
Hi Derek,
ReplyDeleteI discovered your blog and I enjoy your postings. If you are into fitness you might want to venture over to my blogspot:
http://kirksfitnessblog.blogspot.com/
Yours,
Kirk