My system remains on a daily sell both on a trend and momentum basis. Based on the chart above, the market appears to be trapped in a descending wedge formation (both the price and momentum oscillators). The momentum oscillators have expended a lot of energy, but barely any price damage has been done. This is typical momentum signature of a market's move when it reaches exhaustion. Bearish e-wavers could call this as a series of 1s and 2s ie market coiling up, before the big 3rd of 3rd move comes. It cannot be ruled out though. If that's the case, we should see a big price move and the momentum oscillators should pierce thru the lower trendlines of their respective wedges. Looking at the internal structure of these waves, they are all 2-legged moves. So i woudn't bet on the series of 1s and 2s thesis here. I would rather bet on the descending wedge thesis.
On the otherhand, if we get a up move on Monday and the Price/Mom oscillators close above the upper trendline of the wedge, a powerful upmove should ensue.
In situations like this, the benefit of doubt should be given to the trend which is down currently, until it changes, and be nimble when it changes. My guess is we do some backing and filling here, test the lower trendline of the wedge and then break out of the wedge to the upside.
Bottomline, no turn yet ! - Still on a sell....
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