In the last report I discussed the likelihood of an Echo Low associated with the very large double bottom T structure of January-February 2016 to occur prior to or coinciding with the Election, and I think we can now be sure to say that it has occurred.
Double Bottoms and Echo Lows
Terry Laundry suggested that a double bottom resolves into one large T structure with the 2 major lows combining forces. We place the centre-post or vertical line of the T half-way between the 2 lows, and then draw the left-hand side of the T from the price peak to the centre-post, and this projects the end of the T.
We can see this clearly in the first double bottom of late August- September 2015.
Terry Laundry also pointed out that if you draw the T from the second low this will often project a price low instead of a peak – an Echo Low. (Marked in gray).
Echo Low prior to the Election and a Buy Signal
On 2 November I advised my subscribers that we were close to a bounce, and advised very short term bullish below the Buy Signal level.
On 7 November the market gap-opened above the Buy Signal level indicating the confirmed change of direction and long entry above 2104.
On 8 November I advised protecting the long position with a hedge in case of an adverse reaction to the election.
This significant move up has now confirmed the prescence of a new large T Structure with highs projected for Christmas and New Year and additional 'highs' in January and February.
This is why I use price to confirm the signals and not opinion. Price will get you into the market and ensure that you are not trading against it for very long.
Be prepared.
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