A Quick Look at The Average "Wave" Up Since March

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The chart above gives a simple view of the average move up in this bull phase since March. Using the simple approach listed on the chart, it would average out to be about 15 days per wave up. Assuming the market makes a new high over the next few days, the current wave up will be 13 days or more which is approaching that average.

An oddity of this move up is that it is the only one since March that has had steadily declining volume throughout. From a textbook perspective this is bearish, but when it comes to real world back-testing that may not actually be that significant. In any case, when a market has an established trend and rhythm, it is worth noting when that rhythm is broken. Whenever this move up does end, the decline afterwards should answer some key questions I have about the larger context of the market.

The chart also notes that stocks have had a tendency to rise into the 3rd week of the month near expiration and then shown the declines in the 2 weeks around the turn of the month. So far that is playing out this month as well.

Click on Chart to Enlarge

On a short term note, the last couple days have created a pennant or triangle formation easily visible on a 15 min chart. These types of formations are typically seen as a next to last wave (4 or b in Elliott wave). While I don't typically read much into real short-term patterns, I do think it is likely that the pennant will resolve to the upside at least briefly. There are some news items tomorrow morning that could create a gap up or early run up, which could be sold to result in a bearish reversal candlestick pattern like an engulfing pattern or shooting star.

I think there is a good chance of a trade entry tomorrow, so for those interested, I would check for a post around mid day and during the last hour if nothing is posted earlier.