Terminals are tricky, which is why even when most e-wavers detect them, they fail to trade them. The problem with terminals is that they don't unfold in a text book fashion. Either they end in a throwover, giving the illusion of breakout and scaring the heck out of the short sellers or they truncate, keeping folks waiting for that another not-to-come leg up. In this case, it looks like a classic case of truncation to me. Wave b unfolded as a irregular flat and wave d as a triangle (alternation) and then there's waning momentum from wave a to wave c to wave e. We failed sharply after wave e. Then we went and backkissed the broken wedge and failed sharply again today morning.
Both my terminals calls i.e ending diagonal pattern calls in 2004 and 2005 were right on the money. One can go back and search my posts on traders-talk.com. I have reasonable confidence that this one is a terminal too. If so, we should see a fast selloff to SPX cash 1360, virtually giving no opportunity for anyone to position short.
This is a unique point in the price structure where the pattern, price-action and the momentum are all converging to a sell !
Short from ES 1407.
Enjoy your holidays !
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