If the week ends with yet one more timid rally, bulls will be under serious pressure to deliver on Monday. Yesterday, it almost looked as though Da Boyz had shorts on the ropes when the Dow Industrials halved a 200-point opening loss in mere minutes. Alas, the remainder of the day was spent in a wallow, and by the final bell the Indoos had not exceeded a single peak recorded the previous day, even on the lowly 5-minute bar chart. In the meantime, the lower lows occurring each day are adding power to a bearish impulse leg whose demeanor ultimately will determine whether the long-term bull is dead or merely pausing for breath. (Click on chart to enlarge) In Hidden Pivot terms, an impulse leg is signaled when a trend leg exceeds at least two previous highs or lows. In this case, the collapse of the Industrial Average has already breached four prior lows without a correction, suggesting that a very powerful reversal has occurred. What constitutes a 'correction'? Very simply, and according to the Hidden Pivot method, a countertrend comprises at least two bars making successively higher highs or lower lows. When this occurs, the AB 'impulse leg' will be seen to have broken into an incipient ABCD pattern. This is illustrated in the chart above, where I have drawn a dotted line extending yesterday's price high hypothetically. If the actual high had followed the dotted line, exceeding the previous day's high by even a hair, it would have ended the AB impulse leg and started a correction that ultimately would describe an ABCD pattern. Any Rally a Short Notice as well that the Indoos will have a chance to further stretch the downtrend today so that it surpasses a fifth prior low without a correction. This would occur
LATEST TRADES
