EOD: The projected low at 4100 zone (wave 'v') could be it for the week's low or it could be retested/taken out a small amount. If a whipsaw takes over then new highs will be quickly following and we will wait for the pivot to begin somewhere higher up.
11:35 am EST: Some relief on the oversold breadth intraday so we will see if this is simply a whipsaw or if there will be a two week persistence producing an overall breadth and market decline [aka 'pivot']. Not a major decline according to the vectors so far which gives credence to a pivot structure unfolding. Could even extend to three weeks as there is a lot of ground to cover regarding an unwind of the market and the associated parameters. There are volatility gaps that likely require filling which should also drive a bounce/range bound moves. A first week ending decline around (-)1% to (-)1.5 % in the market could be expected inside a pivot structure.
11:35 am EST: Some relief on the oversold breadth intraday so we will see if this is simply a whipsaw or if there will be a two week persistence producing an overall breadth and market decline [aka 'pivot']. Not a major decline according to the vectors so far which gives credence to a pivot structure unfolding. Could even extend to three weeks as there is a lot of ground to cover regarding an unwind of the market and the associated parameters. There are volatility gaps that likely require filling which should also drive a bounce/range bound moves. A first week ending decline around (-)1% to (-)1.5 % in the market could be expected inside a pivot structure.
11:10 am EST: If this decline recovers to new highs in a matter of days, then likely a whipsaw and the pivot is yet still to come. Breadth is looking at daily oversold numbers so could be a bounce looming.
So far behavior is supportive of a pivot action- not a major decline. Main take away is to achieve 1) weekly breadth decline for at least two consecutive weeks on the histo bars for NYAD MACD 2) a summation weekly rollover with a market decline and then 3) new highs [similar action to a wave iv / wave v topping]. Let's see if that continues. The proximity to a large degree wave 5 terminating looks promising.Commentary: A note on abstract 'reasoning' and how it fits trading strategies: 'catch-phrase' ideas do not necessarily fit well with reality when it comes to trading. Trading is primarily about agreement between parties to buy and sell whatever is being peddled and the only barometer is what the data says. Nothing more. So ideas like 'sell in May', 'it's a bubble', 'wall of worry' etc. can be stated after some repeated observations but give no real clue as to what you should trade and when. The real work that has to be done involves investing time, analyzing data correctly and throwing out any distractions that do not involve demonstrable results over time. Hopefully, we can keep that goal in front of us as we navigate the machinery of trading behaviors.
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