Yesterday’s dive is cause for annoyance rather than despair. Notice how it left a robust impulse leg on the daily chart very much intact. I use the word ‘robust’ because the rally exceeded not only the required internal and external peaks, but a second external and yet another ‘shaded’ one to boot. I’ve sketched in a hypothetical entry point (x), but only as a rough guide. In practice, if an ‘x’ is triggered, we should initiate entry on a pattern of much small degree, with commensurately smaller, initial theoretical risk of perhaps 5-6 ticks.
