The Deviant Standard

Digging into one minute charts doesn’t always show clear wave structure, but when it does it you would like to see it conform to your market expectation or otherwise use it as a hint to look for other possible scenarios. 

We have clear waves on from our morning low that tentatively carries the label (i) and so far price action supports a correction underway.  We can count 5 waves up into a, then 5 small waves down into [A] of b.  A possible  3 three waves up into [B] of b are developing but are currently testing the timits.  Should [B] be contained and end in three waves, it will continue to support our outlook.

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Before being sold off to new lows, Monday saw and intraday rally off of from new lows.   As if following the same scrrpt, new lows on Tuesday were met by buyers who stepped up late morning.  Only time will tell if sellers rehearsed their lines and are ready for an encore after the lunch hour. 

If this bounce isn’t sold immediately, then we should be able to mark a wave (i) complete at morning lows and begin our search for the end of (ii) for resumption of the downtrend.  Seeing indications that b of (ii) is complete would build confidence in the count and help us find likely targets for the end of (ii).  That would leave us relying on the white count from Monday evenings issue of The Standard Deviant.  For now, the blue rectangle provodes a wide range of possibilities.  Particular areas of interest are 9915, 9954, 9978, and 10017.

We keep wondering when and if we’ll get some sort of a corrective bounce and from what levels.  Tuesday morning action is seeing bounces from new lows.  The leading industrial group?  Basic Materials.  Check out the daily chart.  We’ve seen our leader…  it’s a dead cat bouncing.