A Break Here Could Open a Can of Worms
On Monday, the E-mini S&P 500 futures confirmed the completion of last week's diagonal pattern at the 1471 high. Now the question is whether that diagonal completed the entire yellow wave 1 in a much larger ending diagonal, or if it represented only wave 1 in wave (5) of wave iii of wave 3. If it's the first option, that would indicate a downward trajectory into month-end in a larger wave 2 retracement.
At this point, the jury is still out on that question. We are looking for the market to maintain support above 1456, which would keep us confidently looking up and above 1500 in short order. But 1456 really must hold, and if it does not, the ultimate answer rests in whether 1445 will hold as support. Any break below 1445 would put the Es in a relatively clear larger diagonal pattern, with the potential to head back down toward the 1400 region in a wave 2. In this case, the last top would be marked with a yellow 1 as wave 1 of a larger ending diagonal....174 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
There’s no substitute for a trading floor to get great ideas, so Jim Cramer created a better one at Real Money and blogs there exclusively. We then added legendary hedge fund manager, Doug Kass, with his exclusive Daily Diary and best investing ideas. Staffed with more than 4 dozen investing pros, money managers, journalists and analysts, Real Money Pro gives you a flood of opinions, analysis and actionable trading advice found nowhere else, and allows you to interact directly with each expert.
Already a Subscriber? Please login.