Predicted Trading Range for 2/26 and Possible 3 Drives Forming
Part I: The predicted trading range for tomorrow, Monday, February 26, will be between 25402 and 25000. Market futures say 25411 at this time, but given the lack of news over the weekend it is likely they will return to more realistic levels. Obviously a 400 point swing is highly unlikey, but given the volatlily that the Dow has experience as of late, this type of swing is within the realm of possibilty. The range is made up of two trend lines and a support level. The upper trend line dates back to November, when it initially emerged as a support and stayed that way until the events of early February. Now it is holding the market back and providing the perfect cushion for the three drives pattern we could see forming this week.
The second trend line is relatively weaker. It is a short trend line whereas the previous example is dates back months. I would be surprised if the market hits this line tomorrow, expect a quick jump to the long run trend line in the morning and a slow retreat towards the market open price throughout the day.
Finally, there is a support/resistance line that first appeared in January at 25320, just below where the market futures are tonight. If we have a full day open to close above this line, we could see an avoidance of the three drives pattern I have illustrated on this graph. As a note, the candlesticks may only be 4 hours long but given where we are in the economic cycle this month could pave the way for the next year.
Part II: Partial three drives pattern initiated, possible completion of the bearish pattern over the next week. As we can see, the first triangle of a bearish three drives pattern has been nearly completed. If tomorrow we have contact with the resistance trend line, and the inititation of a retracement, expect a bearish three drives pattern to be fully engaged. If so, this could be the C wave in the current DJIA Elliot Wave cycle. \
I'm nuetral heading into this week, but anticipate on picking up a bearish position if these two predictions begin to develop. As always I love to hear feedback and any questions or comments.
The second trend line is relatively weaker. It is a short trend line whereas the previous example is dates back months. I would be surprised if the market hits this line tomorrow, expect a quick jump to the long run trend line in the morning and a slow retreat towards the market open price throughout the day.
Finally, there is a support/resistance line that first appeared in January at 25320, just below where the market futures are tonight. If we have a full day open to close above this line, we could see an avoidance of the three drives pattern I have illustrated on this graph. As a note, the candlesticks may only be 4 hours long but given where we are in the economic cycle this month could pave the way for the next year.
Part II: Partial three drives pattern initiated, possible completion of the bearish pattern over the next week. As we can see, the first triangle of a bearish three drives pattern has been nearly completed. If tomorrow we have contact with the resistance trend line, and the inititation of a retracement, expect a bearish three drives pattern to be fully engaged. If so, this could be the C wave in the current DJIA Elliot Wave cycle. \
I'm nuetral heading into this week, but anticipate on picking up a bearish position if these two predictions begin to develop. As always I love to hear feedback and any questions or comments.
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My apologies for the poor convergence of lines, I did this well exhausted last night and wasn't paying too much attention while scrolling through the chart.