Professor’s Comments – Before the Open 2/26/2021
Posted by OMS at February 26th, 2021
Yesterday’s impulsive decline in the markets did a lot of technical damage to the indexes. By closing below the key support numbers I mentioned in Thursday’s Comments, it’s now likely that the final top is in. All I’m doing now is waiting for confirmation from the Scalp Trading Indicators.
So far, the only index on a Sell Signal is the NASDAQ. The S&P500 (SPY) is still on a mixed signal with negative volume but positive momentum. The Dow (DIA) remains positive.
Because of this, it’s still possible (but not likely) that yesterday’s decline was corrective wave 4 of a five wave rally to a final top. But corrective wave 4s do not invade the territory of the previous wave 2, as happened yesterday. This makes last Tuesday’s low of 311.6 on the Dow a significant data point. If the DIA breaks below 311.6, its likely the down draft will continue. Otherwise, there’s still a chance for another rally, but now that the key support levels have been violated, the rally will likely be a wave 2 instead of a wave 5.
The market are at a very critical point now. Please be careful with your trading.
h
Not sure of the terminology we use? Check out these articles
The Hockey Stick Pattern
The Creation of Waves and Trends
FAQ
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Category: Professor's Comments