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* Cable remains at a critical near term juncture following a 5 wave recovery from new lows.
* However it is doing everything it can to maintain the bearish case and the four underlying reasons for being short...for now.
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Start or End of a Downtrend?
The five wave trend sequence to marginal new lows could be the end of the downtrend but also can still be the first leg of a new decline.
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Analogy with 2010
This is supported by the similarity to 2010 price action that places Cable today at May 12th projecting a further new 225 pips lower to 1.4590.
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Same Type of Correction
It is also same as the irregular corrections since the 1.5750 top which were punctuated by a break to new lows then followed by a 5 wave recovery from new lows.
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Confluence of Bullish and Bearish scenarios.
But perhaps more importantly even from a bullish perspective, the 5 wave rally should be corrected more than it has been already.
Following the short term five wave decline yesterday providing a chance to cut shorts we have resold the 1.5130 corrective target for a break down now through 1.5025 and the bottom picking traps of 1.5015-1.4970 50-61.8% in at least a typical Cable retest of the lows. Cable Bulls should use this opportunity buy. And prudence suggests it may be wise to cut shorts again. But only if Cable fails to hold below 1.50 or breaks 1.5220 will I reverse for 1.5395 the 61.8% and even 1.5750. But what does rudence know?
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