"What did we need to take out for the bearish scenario to unfold?"
Here's how I read his comments:
We needed a wave 5 failure, and Zoran's previous interpretation was that wave had 4 ended and wave 5 began at the spot where he's got the pink expanding triangle marked (shown on page one and closer on page 2). His interpretation was that wave 5 had disintegrated into an expanding triangle and completed, thus wave 5 would have been a failure wave and would have marked the terminal point of the move off the October low.
However, it turned out that wave 4 dipped below wave 2, but then consolidated and completed above wave 2. It is at this point, then, that wave 5 really begins. Wave 5 has reached 38.2% of wave 3, which is the minimum level for completion. However, if wave 5 exceeds 99% of wave 3, then this will have FAILED TO BE A TERMINAL PATTERN by his count, in which case a very strong up move is likely.
Further, T5 is expected to be corrective (his conclusion #3), but so far is IMPULSIVE. Thus his interpretation is that T5 is not complete. (the salient point for prudent traders IMO being that maybe there are others reasons T5 is impulsive). He also notes some ambiguity about interpreting the fact that wave 4 made a new low below wave 2, but then failed to follow through, and notes that the strong up move is typical of a pattern failure (in this case a failure of a bearish pattern to follow through).
I chose to take both of these points as WARNING signs for those intending to go short in here.
Further, the count presented is only one interpretation of the move off the Oct low. It's also possible (among other counts) that we have only just started wave C from the October low, in which case you DO NOT want to be strongly committed to the short side in here.
Hosmer |
