Wow the S&P 500 is once again trying to break the all time highs! We had a momentary scare the other day with almost breaking the previous higher low, but price held up so for now, the trend is still up without question. The big unknown here is, at one point will the sellers come back into the market? When we’re up in an area where there haven’t been sales before, we don’t have any past history to use to gauge what might happen. But regardless of anything else, what I see is potentially a continuation of what I believe is a daily Elliott Wave 3. The trend is up, the indicators are all up and heading higher, so no matter how nervous the media gets, the technical analysis is all bullish. Even on the smaller timeframe, everything is still looking up with room to spare. Ultimately we have to trade what we see and not get tricked into listening to the random noise all around us from traders who may have a completely different S$P trading strategy.
If you’re trading the Russell 2000, the last few weeks have been pretty frustrating and choppy. No real good trend, no real direction, but it seems like this could change any minute. If we hold the higher low, then we are continuing to the upside and if we do break out, then I’m looking for a potential daily Elliott wave 3 continuation to the bull side.
Crude oil looks like it may have complete the pullback of a wave 4, but on closer inspection, I’m not quite so sure. Maybe this is actually . just a large ABC pattern that will get all the way to the 61.8% level. It’s just not real crisp & clear at the moment but there’s nothing we can do about that, we just have to adjust the analysis as we get more information. Though my analysis at the moment is pointing to upside, be prepared in case the market proves you wrong, and protect your account.
As for gold futures trading, gold had a nice pop up but was immediately slapped down by the bears. They weren’t able to push very hard though and right now we’re heading to the upside. Momentum is trending downwards though, so this is going to be an important time for gold to see if it’s able to push higher and break the recent high, or if that momentum oscillator drags the gold futures down to break the previous low and start the full 5-wave cycle correction. Overall though it looks good for some more upside at this time.
For natural gas trading, the wave count I’ve been drawing on the daily timeframe just seems too small, I think it’s more of an intraday wave count and maybe we’ve just finished a wave 2 down and heading into a wave 3 to the upside. But if this is a wave 2, it could come very close to the start of wave 1 so we need to beware of possible further downside.
For my Bitcoin traders out there, it seems that we’ve completed the ABC correction in BTC and could be heading higher from here. If it does manage to challenge the previous all-time high around the $20k level, will there be many sellers waiting? Or have they mostly been washed out in the nearly 90% correction? We may find out later this year if things keep going the way they have been, with the bulls pretty firmly in control. If prices don’t head higher, however, and we take out the wave C low, then everything has to be re-examined and rethought in order to fit the market’s behavior. That’s how it goes with technical analysis, it’s much more art than science.
That’s all for now, see you Friday!