Mercury

The US large caps did indeed drop off on the US open as I had suspected but then rallied back hard (at least on very short term chart time frames. This is exactly the kind of Whipsaw price action I was talking about expecting to see in a final phase of the Bull. On US large caps I am minded to favour one more final ATH but I think it will be a rally full of more whipsaw price action, very hard to trade unless you are riding the micro waves as a day trader scalper. I will be staying on the sidelines and waiting to see how price action develops, plenty of other markets to make a buck on in the meantime... I think it could be much easier to track some of the other markets that have (probably...) already made there bull market tops. I charted the FTSE last weekend (see above) so will continue with that but I could just as easily use the Dax, Nikkei or Russell 2000. IF the ATH back in May 2018 was the top of the market and the drop down to Christmas 2018 was a wave 1 (1-5 form so likely) then the rally and turn at the end of July was a wave 2 (purple) concluding at the Fib 88% (a lower high). This rally was in a clear A-B-C form so supporting of a retrace rather than motive wave. Price turned and dropped dramatically in an almost vertical drop, very bearish and what one would expect of a turn in to a major wave 3 down. The move down to the recent low was a definite 1-5 which is aligned to a wave 1 down (outside chance it could be a larger scale B that would bring up a slightly higher wave 2 (purple), maybe a double top but the price action does not support fresh ATHs for me. FTSE100 has been consistent less bullish that the US large caps, well everything has been. I think it is only now a matter of time before US large caps give it up too. So if the recent low was a wave 1 then we should now see a retrace counter trend rally in an A-B-C format. If, as I suspect, we either see fresh ATHs on US large caps or a very strong retrace (think Fib 88% or double tops) and if this is an ending move for US large caps with a lot of whipsaw price action then other markets are likely to also see whipsaw price action but in a narrower range. Therefore I will be looking to see if we get a complex retrace on FTSE, DAX, Nikkei, Russell 2000 etc. If I see this emerging in the coming month these markets could offer credible top out insights into US large caps, which are the markets I want to trade Short in due course. Retrace turns are easier to spot that ATHs or ATLs because we have support/resistance zones to work with. I have mapped out a roadmap on the FTSE 100 as an example of the kind of thing I am looking for. I have no way of knowing in advance how this will play out, which is why I will probably not trade it until we get to the end game. This is a way to monitor the stock indices to spot the next major turn. If you were of a scalping persuasion though, such a route map might help support whether you favoured longs or shorts in the short term swings. This is not my thing so I will let it play out and ensure I arrive at the critical moment in a good frame of mind and with my account balance in good shape to take advantage of the big one. Are we there yet? No but maybe in a few months...

Well one of you is wrong... The thing about trading is that different traders see different things. If they didn't, if they all saw the same thing, the market wouldn't work, it would be in perfect equilibrium all the time and simple gap jump to the next perfect valuation. This, by the way, is why value methods don't work in my opinion. It is easy to be a value investor in a raging bull market... The markets are voting machine, not a weighing machine (not my quote). It is principally speculation and therefore it is all about sentiment. Must I keep reiterating the same things over and over again? The trend is your friend, until the bend in the end. As a swing trader I am all about seeking that bend and understanding where in the inexorable up/down; down/up cycle. It is not surprising, in fact it is expected, for trend followers to disagree with my analysis at key turning points, indeed if they did not I would be worried. Trend followers, in general, including some of the well know hedge funds, follow the trend over the edge and then have to madly scramble to cover. Sure some have trailing stop mechanisms but by then it is all over. I don't have a problem with this it just isn't what I do. When having a discussion with someone it is vital to know where they are coming from and we can all be right from our own perspectives, at least for a while... I think my past post have been pretty clear on where I stand on both Gold and Silver and why. I think the trend down from the 2011 highs is over, check out my many technical analysis posts on this thread for why. I think both are in the process of, or have already, broken key resistance (more Gold than Silver in this case) but I feel like there is a strong case for a significant pull back before the uber rally really gets going, I have also posted on that previously. All clear? @dmedin, I have a lot of sympathy with your views, I too would not go Short until I see reversal signals. We are flirting with that now but nothing conclusive yet. However, as with the recent scenario on the US large caps, and other stock indices, and therefore most of the individual stocks (as I know you like to look at these), to be successful one must be open minded to these trend change breakouts. This is how I caught the Bearish fast drop at the end of last week and how I cashed for profit before the rally eroded my profits. I will remind us of that @elle wisely said a little while ago, "every trend is destined o be broken" (or words to that effect. It is the breakout a swing trader seeks. It is the breakout that cements a trend change BUT in some cases we don't have to wait for that, if we identify a credible bottom, which I believe I have on Gold and Silver and traded it accordingly, which I also posted on previously. Not sure how much more clarity I can offer. Disagree if you like no problem.

There are a number of so-called safe haven assets or markets that are frequently mentioned in trading and investing circles such as utilities, gold, USD and so on. The Yen falls into this category mostly because, I think, in the past 30 years or so the Yen has a track record of appreciating against all currencies, including the USD. This has a lot to do with the stagnation in the Japanese economy that spawned "Abenomics" in a probably futile attempt to trigger growth. This is basically the same central bank policy as most other democracies. In the case of Japan however the central bank has wound up effectively buying up stocks as well as loans. Recipe for disaster. In the short to medium term I don't see the Yen changing it role, although long term I think something big could happen. If we start to see some fear grip the markets; if the recent drop is from the top of the bull on stocks; if interest rates start to tick up; if recession or worse starts to emerge as not just talk then a flight to safety is an obvious thing to track and get in on. However if longer term this thing goes into a full on deflationary depression then USD will be the go to currency and the Japanese may get the thing they have long desired, through no action on their part, and that is a weaker Yen. So much for the fundamentals, let's look at a couple of long term charts for the technicals. On the Quarterly chart I see the following key points: Massive rally in the Yen since before the 1970s, which is at the heart of their economic issues as an exported of finished goods, well that and the commodity bull, as an importer of raw materials. I am sure there are more qualified economist who would have a better handle on this than me. My main point here is that this move went in a 1-5 down to the 2012 lows. Potential Head & Shoulders formation in progress but maybe that right shoulder is not yet in? If this is a H&S then the neckline is formed by an excellent long term down-sloping trend-line with 3 great touches and a prior pivot touch as well. A breakout through this will be a massive buy signal but that is far off in the future. We got a 1-5 rally off the all time low to wave 1 or A and over bought oscillators on all charts at the turn. On the Weekly: There was a smaller scale Head & Shoulders at the wave 1 (or A -Purple) top and a nice neckline breakout to signal the bearish move. This move down could be either a 1-5 or an A-B-C so mostly likely the wave is an A (Pink). Then the bear move channel was swiftly broken and a relief rally ensued that rose up to make a failed retest of the neckline. This move is in an A-B-C, which is a retrace form and therefore I label this a wave B (pink) overall. If this is correct then we should next see a bearish wave C move lower than the wave A (pink). I was thinking we would get a swift wave C but the market has gone into a protracted sideways consolidation that for a long time I couldn't unpick. With more price action I now think that this is a complex retrace. We have had the first 2 main waves in A-B-C form so wave C is doing the same. This first part (Blue A-B) is encompassed within a consolidation triangle (very large one). Each leg is also in A-B-C form, lots of whipsaw price action consistent with both a consolidation phase and a complex retrace. Since wave B (blue) we have had more whipsaw that looks to be a couple of 1-2s (or A-Bs) and now price has arrived at the lower line of the consolidation channel. So a breakout to the downside brings up a test of the previous lows (wave A pink - 9900 area) and a break of this support means we are indeed in a wave C which has a number of potential end points, the most bearish of which would be a right hand shoulder to complete the H&S formation. If that occurs then a long lasting bull market on this pair would ensue. I will seek to short this market on a sustained breakout that, in the main, would occur either on sustained USD weakness (which we are probably due) and/or stocks reverting to a bearish stance (which is eminently possible). Once we see a retrace turn (which could be months away) AND if this is consistent with a long term recession and stock market bearish move I would look to catch the bull market in the USD via this pair as a preference vs any other pair. Edit: Also forgot to mention that for me Yen strength is sometimes a leading bearish indicator for stocks. The Yen has been appreciating vs USD since 24 April. I have mentioned this before on my stock indices thread. It was one of the macro factors that was prepping me to go Short stocks on a good set up, which we got on 1 August.

That is a hell of a weekly pin bar candle on this week on the SP500 and other US large caps. The week isn't over though and my question is whether or not this is sustainable? If I look at the 1H chart the SP500 has hit the Fib 62%, a classic retrace level, which is also on a zone of wave C, wave A equivalence, another typical feature for a move turn. The market dropped sharply after the close last night and I went in on a Spec Short. The overnight price action didn't resolve anything but this morning the European markets are looking a little bearish early on. Based on the Weekly candle I think the market should end the week a bit lower at a minimum. Based on technicals we could either be seeing a larger A-B-C with a higher test next week or a smaller, although not small, A-B-C completed to bring up another bearish phase and break through recent lows. In addition to the above technicals I also have a valid A-B-C (red labels) and NMD at the turn and possibly a small 1-2 done with a larger wave 3 down in the offing.

This pair did indeed bounce back off resistance and now my Short positions are covered at BE. The move looks like a turn at this point and is supporting a wider general USD Bearish move to continue in due course. I might expect the current 1H chart phase to continue down a but further but before any major bearish move I would ideally like to see a pull back relief rally, which would offer a good opportunity to get Short again.

GBP has been idling for some time, not joining other pairs on respective short term moves. With a slew of UK data coming out at 09.30 maybe this will trigger a breakout. This market is fairy straight forward right now in that it either breaks through support into a new bearish phase (re-evaluation time for me) or rally hard out of this support zone. I am leaning to the latter, especially if EUR also rallies out of its consolidation phase.

I would have expected EURUSD to have retraced lower by now but price has remained stuck in a consolidation zone that is tracing a narrowing triangle. As these types of formation, albeit only short term, are usually a continuation pattern the odds seem on the side of a rally breakout. Either way the breakout is what I am looking for. I would not Short the breakout to the downside as I will wait for a potential turn lower for a Long but I would go Long a strong breakout in advance of a test of the weekly chart upper channel line.

Ah well there is one area we differ @dmedin. I don't care what Trump, or anyone else tweets not why the market participants chose to send the market down and then back up. I just care that it follows my road map and triggers my trading set ups, which it did, both ways. I chose to make sense of the market through the use of technical analysis, which at its heart is about mapping human psychology acting within a crowd. This is not new, the main elements were developed as much as a hundred years ago and still work today because people have not changed. They say the market has memory. That isn't really accurate. What is really happening is that market participants (humans) are reacting to similar sets of circumstances in similar ways - Fear and Greed; Greed and Fear never-ending.

Not sure if that was a rhetorical question or not @dmedin Overbought/oversold is not the factor that I look at, except for corroboration via oscillators. I find you cannot successfully use oscillators as a trigger for a trade, far too many false turns, especially in a strong trend, which this is not. My method is based on EWT overlaid with charting techniques and a supported by a handful of mathematical indicators. I need to see most or all of my signals to take a trade and the trade needs to fit my road map. If I see price action that does not fit my road map I stay out or cut my trades short and wait until I can make sense of things again. Note I will have several possible scenarios in play at any one time with different levels of confidence. The speed of the move is important as the faster the breakout the more likely it is correct, however you do get sharp reversals, especially around key data releases/policy announcements as the algos go crazy. Best to wait that out generally. After than it is about watching the progression of price action through key support/resistance levels and mapping the move with EWT in flight. Momentum Divergence is a key tool for me to identify turns and reversals. So is historic price action. For instance on stocks we often get a sharp V shaped reversal at bottoms. If this occurs at a key support zone I will typically assume the move is over and cash at least half. This is what happened on US large caps (all of them simultaneously) on Monday. The balance of probabilities suggested to me that it would happen again and we would see another ATH. However we may only get a retrace and a drop again through the supporting trend-line of the channel. If that happens the Bear is on. In terms of catching the Short, I have posted on this already but to summarise: Price has traced a credible EWT count to a turning point Price was at or about a very long term resistance trend line (monthly/quarterly) and a medium term (daily) upper channel line There was strong NMD on all time frames I look at (nothing lower than 1H, occasionally lower to get some clarity for EWT or to reduce my entry exposure if trading manually rather than stop ins. There was a a short term (4H/1H) ending channel with the 5 touches I look for (can only take 4 sometimes if the fifth falls short). There was a breakout of that ending channel to trigger a Short (Stops above the ATH). Annoyingly there was that sharp reversal but it came up to the Fib 76/78% resistance zone and didn't stop me out and then crashed fast back through the channel lower line offering another Short opportunity. This all happened on all the related markets and something similar happened on the FTSE but without ATHs).

OK but can you learn from it? It is all well and good seeing where history tells you you should have made a trade but was there a way to get sufficient indicators to actually trade it? This is where you need a methodology to provide insights into where in the cycle a market is and where the breakouts might occur. There are several different methods on display on the forum and a wealth of information available to research and practice, isn't this what you need to do? I am always amazed that the majority of people come into this with no training and no study months put in. Is there any other field of endeavor where people would expect to succeed without training and practice? And by the way I include myself in that group as that was exactly what I did at first too. Cost me a lot to learn the hard way...

Something similar happening on Gold with a potential resistance and channel overshoot and return back. A small 1-2 bullish retrace followed by a small drop and channel lower line breakout. Not as strong a set up not as definitive on price action but the saying, "as goes Silver, so goes Gold" springs to mind. Or is it the other way around, certainly was for a few months there.

So has Silver peaked? Sure looks so. On the Weekly chart it looks like a failed test of a long term resistance trend line and associated resistance zone. As the week is not yet over this is inclusive so lets look at the daily. Here we see that rejection on strong NMD and a 1-5 EWT count. If this holds below today then the bearish retrace is looking on. On the 4H chart you can see the move on ore detail with a small 1-2 bullish retrace o set up the fast move down. The price action on the 1H will be important to distinguish whether this is a medium term trend change or just a blip (note the LT trend remains bullish).

Thanks for the clarification @Foxy, I have never heard people talk about a monthly cycle, unless it is about monthly accounting, that is more of a quarterly thing though as that is when the funds issue performance stats. I have heard of lunar cycles, Solstice/Equinox effects, Santa Claus rally and summer doldrums though, maybe something worth discussing in my myth busting thread? I am sure forum members have some more. As a clarification to your statement, I am both selling the highs and buying the lows but only at the risk range extremes. I would only add tactical positions once I see a short term trend established. I would not buy at the 26800 level as it would be too close to the eventual end state, although I might let existing longs run beyond that, depends on price action form.

@Foxy, not quite sure what you mean by cycles there, are you talking lunar or economic or something else? Consensus among the contrarian bears on stocks is for an autumn Bear, however this could be when the meat gets going after a top out earlier (i.e. now). One key common factor for all tops is that the are silent, no big news or fanfare, that comes later. That fits. However I would need to see a break of my lower channel lines in all 3 US large caps to get with the Bear full on. We may yet see fresh ATHs we may just see a retrace, time and price action will tell the tale if we are open minded enough to see it and brave enough to act. There is plenty of time and there will be several opportunities to get in on any bear move so no need to think it is a once only chance. For now the buy the dips boys appear to be back in full swing. let's see what the US open brings.

European indecision hands the initiative back to the US so I don't expect much movement until the open at 14.30, barring some pre open algo jockeying. Just goes to show how US centric this bull market is, which does not bode well for the perma bulls in my opinion. All indices bar the 3 US large caps made ATHs coming up on a year or year and a half ago, unless they all rally strongly now... Anyway the key to Tech short term, and all of the indices really, is a breakout to the upside through ST resistance. This morning we saw a pull away from that with European indecision and we may get a further pull back on US open before a rally up through so watch out or that. Technicals do not rule out a resumption of the Bear either so, as I said this morning, nervousness is the correct feeling. My favourite phrase, which I repeat to myself every day is, "if in doubt, stay out".

Took another leg up as EUR dithers about but as it no looks like going bearish EURGBP finally seems to be moving down after a series of 1-2s and an effective mini double top. To be confident I will want to see a break of the ST support and a 1-5 down followed by an A-B-C retrace and then a further larger drop through the daily chart lower channel line.

EURUSD is taking a little longer than I first thought with the market tracing out a more complex retrace but looks to be settling into a down draft now that should be a wave C to complete the retrace and set up a large rally.

Interesting analysis @cryptotrader but not quite sure what to make of it. The individual commodity patterns are not moving together, sometime Oil peaks around the aggregate top and sometimes it is something else. I am not convinced that all commodities move alike, I think agri and livestock has very different drivers to base metals and Oil. Also looks like they have lumped precious metals in with base metals, which is not correct in my opinion as PMs are a separate category (Silver is constantly argued on that, is it a precious metal or a poor industrial metal? The price charts say PM so that's that for me). I can't speak for agri and livestock, I only know that things like coffee and rubber are too cheap for farmers to earn sufficient income to keep them in the business. Others may wish to chip in on the discussion on agri etc, but to me Oil does appear to be bearish, although there is a case for a short bearish phase followed by a strong rally (See chart below). I have previously shared my bullish stance and analysis on PMs so won't reprice that again here. Copper is an interesting one. I am seeing a bearish phase in progress and it could breakout of of long term support into a massive deflationary bear move, which would align with a major deflationary recession. Alternatively, if the recession (which is in my view a certainty, just a question of when the markets crash in recognition of the fact we are already there) is mostly a financial one (i.e. Central bank policy and Fiat money printing driven) then we may get a flight to safe haven of "real things", in which case it will not just be precious metals that appear precious. This will be a hoarding mentality that could also drag other necessary commodities like agri up too. In the end I prefer to look at each market and decide on its intrinsic merits rather than trust to notions of commodities as having a group effect.

Looks like Brent has put in a failed retest of the recently broken support zone (now resistance). The rally occurred off another support zone associated with the underside of the Fib 23% taken on the weekly chart between the all time high and the Jan 2016 low. On the weekly chart there is also a support level between 5800-5400 that the bears will have to push through to continue the move. If this failed retest is proven correct this could provide the bearish stimulus to push through. Now that a potential 1-2 (pink and blue) are a wave 3 (or C perhaps) should ensue, which should show some strong bearish price action in the days to come.

While I await developments on all my markets I am posting on USDCAD, which I have been quiet on for a while as things developed. When I left it I was anticipating a bullish retrace phase and that is what we got. Initially I thought it might be very short term but then realised we were looking at a potential complex retrace (lots of A-B-C whipsaw price action) so I cashed my Shorts and waited for the retrace. Yesterday we may have seen the wave B (brown) top out with a pin bar, I took a spec Short at this point. We could easily see another round trip (down/up) to test the weekly chart trend line (purple) and the Fib 62% as I still expect a final USD rally phase to set up a larger Bear move so consider this for stop placement.

To answer your question @Nelsy-Boy, I too think the same but you are right to be nervy as, if I am right about the US large caps being in an end game scenario, we could see a lot of whipsaw action as this move progresses up either to a new ATH (purple 5 on my chart) or a retrace turn (blue 2). The market is at overhead resistance and must break through this zone to carry on. You could look at the rally off the Christmas lows for comparatives but each phase has its own path so I doubt it will trace exactly the same path as last time. @dmedin, the "swinging up and down every day in huge, random bursts" you refer to may become more pronounced as this move progresses, if this is an end game scenario, and therefore you may be right to stay out until a direction becomes more apparent (either a rocket, this time its different, rally or a bearish turn confirmation). At least then you will know the prevailing direction, although some people are convinced they already do know... However I do not agree that the price action you are referring to is random and the hugeness is what others call volatility, which a trader needs to embrace to make money. I use my technical analysis method to make sense of the apparent randomness and identify trade triggers. There are lots of valid methods, it would be churlish of me to denigrate any others as different methods suit different people, their psychology and attitude in particular. Also markets move in different phases (consolidation, motive, turning points etc) and therefore you need different methods to analyse and trade these phases. For example I use swing trading methods in consolidation and turning point phases and trend following in motive waves. The trick is to figure out where in a cycle we are and where we are likely to head. Buy low, sell high, That part at least is simple... I can say 2 things for sure:1) people may seek the comfort of simplicity but financial markets are the exact opposite of simple (to me simplicity is a shroud rather than a comfort blanket); 2) for me you need to develop a method that you believe in and a strategy for trading execution, and practice it with iron discipline, learning from both gains and losses (you never stop learning). Until you have such a method you are in great danger of losing. This is about the trader not the market. Blaming the market, your broker, forum posts, wider market manipulation, Trump tweets etc is just a symptom. No one is out to get you, 80% or whatever of retail traders lose money all by themselves. I did too at first, a lot! There are some great past posts from various people on what retail traders need to learn and watch out for on the forum, worth checking out. These posters are speaking from painful experience and sharing it freely, that is a gift, as is everything people post on this forum, shame more people don't respect that more... Getting back to the set up question, my technical analysis showed me the following: The recent ATH could be either a market top OR a potential wave 3 that is signalling the next ATH as a market top - I have been wrong on this before as some posters like to gloat about but the point is to try things and protect yourself appropriately. And having this attitude reaped me multiple positions and nearly 2000 points (Dow). Not bad. I had a so-called ending channel (light blue lines) with 5 good touches on the boundary lines (a-e) and then a breakout, which I traded Short (stops above the ATH). We got a large so-called "hard retest" of the channel around the Fed rate announcement but price swiftly turned at key resistance and droped sharply, allowing another Short taking opportunity (as was the second break of the lower channel line). So that was 3 Short entry opportunities. Fast daily moves then ensued, I am not a day trader so I held my shorts, adding judiciously, until I recognised the end of the move by a bounce off my daily chart lower large channel line (dark blue). This is a strong channel, despite the overshoot, which doesn't appear on the other US large caps (note: the 3 US large caps are tracing pretty much the same pattern and route map, with the Dow perhaps a little less bullish, so cross comparisons are useful). It is important to take profits when offered but you don't want to be premature or too late as you give up too much so I took half my positions on the bounce and the other half when it became clear to me that the Bear move was over, for now. Old saying, there is always another trade tomorrow so if the ATH is in already I wont sweat taking profits, I will use them to rejoin on signals. Based on my daily chart and long term projections I see 2 leading scenarios: 1) we rally up to new ATHs but this could be a protracted affair with lots of whipsaw price action, 2) we already have the Bull ending top and now we will see a retrace rally to a lower high. Looking at the 1H chart I see that the bounce off the daily channel line rose up in a 1-5 form. If this was a small retrace it would have been an A-B-C. Next I was looking for a retrace down (which I posted on in another thread in advance using the Dow) and that is what we got. In fact we got a Fib 50% retracement prior to and after the US open, fairly typical to see this kind of thing on the open. On the Dow/SP500 I caught the falling knife at there respective Fib bounce backs but Nasdaq is a bit more spiky so I waited for the next small 1-2 and bounce to go Long on this market. The market duly rose up and put in another 1-2 before knocking on the door of the overhead resistance overnight, which is where we are now. All the stock indices at at their own resistances and need to break through to begin the next leg up. I am already Long from lower down and stop protected at break even so my next move is to trade the breakout, leveraging the paper profits of my previous trades to pay for stops. This is pyramiding (well technically it is leveraging the profit for margin, which I am also doing). Price action will inform which road map we may be following but that is a decision for tomorrow, today it is about whether the market will breakout out and sustain a rally above the S/R level. Good luck!

Daily chart tells the tale. After the drop through the first channel line and failed retest that sealed the wave 2 (pink) retrace top the market put in a smaller 1-2 (blue), which initially I thought was a wave A that would retrace higher to close the higher up gap. That gap turned out to be a breakaway gap (one not closed in the move) and a series of 1-2s ensued. The initial channel turned out to provide a series of parallel channels that almost perfectly signal each subsequent breakout right down to the most recent one that gaped and retested as it closed the gap and then fell away fast through the long term support. Plenty of signals to get Short (I didn't catch them all alas and chickened out of one), despite people saying don't short Oil, I say short any market that is screaming short. One of the best shorts of all time was Oil (actually 2 of them now in recent times). If Oil is going to head much lower, as the set up suggests, it should test the 5000 area, and possible quite quickly now. If we get a lower low vs the previous bear moves low (pink 1) there is no telling how low this could go, it could be a long one. If it does not break the 5000 level then this could be an A-B-C that rockets back up to make new highs. As the set up is significantly bearish now I will hold my Shorts at BE and seek to add on pull backs until the 5000 zone and then reassess. This is the essence of swing trading.

Gold exhaustion spike in the making if US large cap stocks rally is sustained beyond previous highs.

Looks decidedly like a 1-2 retrace move and now rallying away. If correct price should carry beyond the previous high in short order as this would be a wave 3. If this happens then that exhaustion spike I was referring to in my Gold/Silver thread could come off.

If the market turns bearish at this juncture I expect it will drop a lot further than 1450 @dmedin. Going Long there could be catching the falling knife. All depends on a) a turn and b) the price action nature of the move down. If the market turns at 1500 then with the level of NMD against it I would anticipate a significant bearish move until that negativity is eroded. A breakout of the resistance area (or your wedge if it would be valid) would be a bullish signal to buy the breakout.