Stock Technical Analysis: Bull or Bear? The Verdict?

For today’s post, I want to share a chart posted by one of the traders I follow, The Evil Speculator.  At first glance, you’d question the credibility of the site, but it won’t take too long before you notice the quality of the analysis Evil Speculator offers.  If you haven’t visited their site, make sure to do so and join thousands of subscribers visiting their site daily.

Taken from their recent posts:

Pretty much what I expected to happen today – we are at an inflection point plus it’s the Friday before OPX. So, what’s better for those cattle prod wielding market makers than inflict just a bit more theta burn while we wait for a conclusion of this bear market rally saga?

Tonight I find myself between a rock and a hard place. The wave count right now appars quite clear – we seem to have completed an {a}-{b}-{c} and are now completing Minor C of Intermediate (Y) of Primary {2} – this scenario is marked in orange labels on the chart:

Taken from Evil Speculator

Personally, I myself do not feel confident about any of the bearish scenarios that are floating around out in the EWT blogosphere, but I do recognize the potential that, wave count be damned, we might just suddenly drop tomorrow.

So the man behind Evil Speculator thinks we’re going further up.  Well he also shares a separate scenario indicated in blue that is bearish:

I usually never do this but tonight I decided to also show Steven Hochberg’s counts (he’s the author of the Short Term Update and resident editor at EWI) – his is labeled in blue. Basically Steven prognosticates that we painted a flat after the September 25 low, which completed today and that would mean that we’re now ready to drop into a long third wave. So, his count would be that we are in Minute {ii} of Minor 1 of Intermediate (1) of Primary wave {3}.

I deeply respect Steven and it pains me to say this, but I think his count is a stretch at best. Also, the Dollar’s drop today did not help the bearish cause and I have a hard time believing that this market will turn before the Dollar finds at least a temporary floor – thus far the wave pattern on the ole’ buck looks incomplete and we could easily drop below 75 before we finally push into a meaningful rally.

Here are the good news: In regards to Orange vs. Blue we should know very soon – perhaps even by tomorrow. On the chart above I have pointed out the confirmation lines for each scenario. As you can see the orange doesn’t have that far to go.

Indeed, with the option expiration nearing us, this week should help us understand whether the market will make new highs or start retracing.