Another BTD Opportunity?

Today, the market certainly provided us further weakness after striking the highs yesterday morning.  But, as I have noted, as long as we remain over Friday’s low, the bulls are still very much in charge.

This brings me to the IWM chart.  While we certainly have enough waves in place to consider that 5 waves up off the mid-November low as completed, and we struck the target region when we did it, until we break Friday’s low, I am entertaining one more bullish potential. 

You see, the rally into the high did not have a clear impulsive structure, and may have been a b-wave high.  And, with this downside follow through in the IWM looking like a 5 wave structure off the highs, it certainly does fill in a nice expanded flat for a larger wave iv, as shown in yellow.

So, while you may think this an unusual pattern, I still have to give the bulls the benefit of the doubt within a strong bull market.  And, I will maintain this potential as long as we are able to hold over Friday’s low.  Should we break Friday’s low, then it will be the first significant accomplishment seen by the bears in quite some time, and it should certainly make us all take notice.  But, baring an immediate break down, I think we have to consider the potential for another rally.

One of the main reasons I am maintaining this expectation is because the NQ chart still looks like it is missing a final 5th wave to the upside.  While it certainly can rally to a higher high while the other indices remain below their highs, I have to consider the potential of further strength until the NQ is able to provide us with a 5th wave higher high, or until we see a break down in the IWM and the SPX below Friday’s low.

So, for now, I am going to look up just one more time unless the market tells me otherwise.  Remember, in a bull market, bull market rules certainly apply, until the market breaks a support in the bullish trend after a completed pattern is seen.  Currently, we have what can be a completed pattern in SPX and IWM, but NQ still looks incomplete.

60minIWM
60minIWM
IWM daily
IWM daily
NQ-daily
NQ-daily
1SPXdaily
1SPXdaily
Avi Gilburt is founder of ElliottWaveTrader.net.