Tuesday morning's rally to SPX 944 was a Bearish Wolfe Wave 5 "Fakeout/Breakout." Notice how the afternoon retest of the high failed below the top of the pattern (sometimes they make a nominal new high, then fail). This morning's open was a gap down below the Wolfe Wave pattern, and down she went. The SSO almost got to the Wave 6 target line this afternoon.
Goldman gapped down below a H&S Top that contained a nested Descending Triangle (pattern in yellow) in the Head. Nested patterns (patterns within patterns) seem to give an added degree of reliability to the eventual outcome.
I tried to short it at 87.80, the 50% retracement of this morning's gap, but my broker had no shares available to short. Curses! The target was roughly 84.00, which got MADE. The low on the day was 83.65.
Math for the target:
92.20 - High of the pattern
88.10 - Average of the 88.15 and 88.05 neckline data points
92.20 - 88.10 = 4.10 points of downside. 88.10 - 4.10 = 84.00 IN PLAY
Blogger is having an "internal error" problem so I can't upload the charts. I'll try again in the morning. I'm having a frustrating day. LOL.
EDIT: Here's the Bearish Wolfe Wave in the QLD. The target got MADE almost exactly.
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