The behavior of the market participants drives a financial instrument. Over time, that behavior repeats itself. As a technician, we try to determine the markets’ behavior and then predict a possible outcome. Understanding previous behavioral patterns are critical to the analysis.
The weekend Briefing discusses the current repetitive pattern that has led to countertrend rotations. Critical to the analysis is whether the countertrend move is short-term or developing into something larger in a degree of time and price.
Last week, the Stock Indices’ price action displayed some of the same characteristics of the previous greater degree pause. While not all of those characteristics are present, there certainly is enough information to make what happens on Tuesday extremely important to the intermediate-term analysis.