Thursday, February 3, 2011

Natty

As alluded to last week the X wave MAY be complete, and we atre seeing a new series of abc's up to make a Z structure. That has been  characteristic of this market since the 3.28 low last Oct.
Unfortunately the choppy nature of abc structures make certainty regarding this very difficult, compounded by the very small size of the moves up since the 4.25 low, and the fact that it seems to be running into trouble right at the very modest .382 retrace of the presumed X wave down from 4.88 to 4.25.
Active Mo.
 click to enlarge
Note the negative divergence on the hourly 14 RSI. 
This contract really needs to hold the 4.35 low and make fresh highs over 4.50.
Alternatively it is very possible that what we are seeing is a B wave correction within the X down and lower lows under 4.25 are coming up. This is discussed in the previous post. If that is the case, another leg of the X down has measured targets of  4.09/4.12, and 3.90.
Expect the storage number and the reaction to it will clarify all this.



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