Range narrowing, potential correction coming soon
Updated
Since the bottom around $7200 two days ago, we made a strong move up followed by a long sideways correction, followed by a nice wave 3 today that may yet have room towards $9350 area. The upwards channel is marked with the yellow lines but within it the range has been narrowing to the downside, seeming to form an ascending wedge (see red dotted line). If wave 3 break back beyond the red dotted line bearing down narrowing the range, then all is well and we may yet have much more room up before major correction, however this is unlikely. Expect a move to $9350 area, followed by a correction to around $8600 before we make a strong wave 5 up towards the major resistance trendline (which has contained the bear market since December peak) somewhere between $9500-$9800. Here we will probably see a very major correction.
Currently we seem to be forming a flag before our next move. It is possible that we break out without touch the bottom of the flag again, however it is more likely that we go down to $8800 before retesting the top of the flag. This would not be a bad buy area for an aggressive trader.
Currently we seem to be forming a flag before our next move. It is possible that we break out without touch the bottom of the flag again, however it is more likely that we go down to $8800 before retesting the top of the flag. This would not be a bad buy area for an aggressive trader.
Note
The wedge support has been broken and we are headed down. It's not too late to get out of your position if you didn't short yet.
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