Professor’s Comments November 13, 2020
Posted by OMS at November 13th, 2020
Yesterday’s decline in the Dow was interesting from a pattern perspective. While the decline was large in terms of points (-317) it was not impulsive. It looked more like a wave ‘c’ within wave 2 down of a five wave sequence for Wave B up.
If this is the case, the Dow could see a small rally today and then make one more decline to somewhere between 28,700 to 28,900. This does not have to happen. Yesterday’s low was 28,902, so IF a re-test occurs, the next low should be slightly lower than that low.
Here’s the important thing to look for…. IF the Dow does re-test yesterday’s low and it holds, it changes the technical picture drastically. First, it eliminates the immediate Bearish scenario.
Secondly, it means that the Dow is about to head significantly higher as waves 3,4. and 5 up unfold. These waves should carry the Dow back above the 30,000 level, with 30,300+ being a real possibility. An impulsive move to the upside now would tend to confirm that wave 3 up is starting.
The next day or so should provide us with a clearer picture of the developing technical pattern. Right now, that picture is still clouded.
The Scalp Trading Indicators for the Dow are positive. The same indicators for the NASDAQ-100 (QQQ) are mixed.
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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