Bias: Mixed – waiting for breaks
Price shot lower below the 113.60 low to reach 112.07. However, the pullback has been impressive although not yet enough to suggest we could see a deeper recovery. For this to develop we should ideally see the 114.51 support hold. However, do also note support around 113.70 and 112.77-113.22. While these support the upside can still follow-through. We shall need a break above 116.25 to get us back to the key 116.95-11 resistance. It is break here that would generate a stronger rally to 118.29, 119.05 and 119.77 at least.
22nd January: The downside still looks more vulnerable but we may need to accept a correction before the next leg lower. Resistance is seen at 119.77 & 112.15.
Price crashed dramatically below 113.60 and slipped quickly down to 112.07. I find this level a little unusual and therefore prefer a more open approach today. Overall I feel the larger picture is bearish so any rally would likely be only corrective. To revive a more directly bearish structure we'll need a break below 114.51 and the 112.77-113.22. If seen the outlook would begin to favor a more directly bearish stance. A move below 112.75 would extend losses to below 112.07 - next stop around 110.91 and 110.20.
20th January: Only back below 117.40 and 116.84 would begin to bring back a more bearish stance and the risk of a return to 116.22 and possibly lower to the 113.60 low. Also note support at 113.34, 112.27 and 110.54.
ELLIOTT WAVE COMMENTS
Yesterday's I implied a 66.7% projection in Wave -v- at 112.27 (66.7%) and thus this may have been seen ay 112.07. Thus the implication would be a pullback. A 50% retracement of the decline from 122.15 is at 117.11. A 61.8% retracement is at 118.29. These should be treated as approximate resistance areas.
However, I feel the larger picture is more bearish and any earlier drop below 114.51 & 112.77 would pressure the 112.07 low to suggest direct follow-through to 110.20.