Wednesday, August 15, 2012

Three Push Pattern Complete - Market at an Inflection Point

Click on Chart to Enlarge

The current move up since 8/2/12 is now nearly equal in time to the last 3 "waves" combined.  This is typically the time limit for any move of the same degree.  So 1 of 2 things is likely to happen, probably starting tomorrow.  Either a downside breakout of this tight range occurs and the market makes a significant high.  Or the market makes a decisive breakout above this consolidation, and confirms that a larger degree uptrend is in place.

I recently mentioned a three push pattern that could be forming on the hourly chart here.  With the recent push to slight higher highs, we now see a clear succession of 3 lower highs on the MACD since late July and 3 wedging higher highs in price.  This type of momentum pattern often shows up in rising wedges or terminal impulse patterns, which can both lead to strong reversals.

The next couple days should define the trend direction.  I'll update as this unfolds.

As of today the multiple time frame momentum set-up in stochastics is beautiful for a short/inverse trad opportunity at the next daily sell signal.

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