I misspoke. I actually meant - do you think that traders *should* have behaved differently? My assumption is that most successful strategies involve determining if a market is trending or ranging, and then using high probability turning points for entries and exits accordingly, backed up by smart money management.
The behavior of the war rally was clearly what one would expect to see if a market was trending (in Elliot terms, impulsive). Therefore, I think most good traders would pay it respect and look to buy the next dip. As Ellioticians, we are looking at the character of the retracement to determine if it is likely only a correction, or fresh impulsive down. So far, the retracement hasn't completely cancelled the positive nature of the war rally, although we are critically close to that point.
It looks like this move down could use at least another wiggle leg, and if that's true, it is likely to negate the impulsive look to the war rally.
You see us then in "c" down of the flat, with the big "C" up to come. I am suspicious that the environment could produce that. Perhaps a victory rally could, but it certainly isn't the right time seasonally. There is little for me to support the notion that the October lows from last year were durable enough to last so long. I would expect them to fail by August at the latest, but if they held on even that long I would be surprised.
BC |
