Leading diagonal pullback time

Leading diagonal pullback time


Hello friends. Stocks may have formed a leading diagonal in wave A, which would lead to a pullback in wave B. The pullback for this move often goes to the 0.618 level. Note that the top is *not* in yet, so the fibs are not set in place yet.

The ideal way of trading one of these is to wait for a sharp move below the high of 3, and then short it there with a stop above the highs. This serves 2 purposes:

1: Limit losses easily with the high
2: Confirms that there is selling pressure within the market before you sell

If this idea is correct, we could see a very sharp rally into the 28th, where we could reverse.

Thanks for playing.

Leave a Reply

Your email address will not be published. Required fields are marked *