Technical summary:

The decline from 139.02 was much stronger than expected, which has caused a change of the short-term count. The question is whether the rally from 133.27 was a leading diagonal or just a B-wave correction?

If the rally was a leading diagonal, it will of course have bullish implications and call for an impulsive rally in wave (iii) once wave (ii) is over. A rally above 139.02 will favor this scenario and a rally towards 145.33.

The alternative count that sees this rally as a B-wave will have bearish implications. If this scenario is to be proven correct, a break below 133.27 is needed, which will call for a decline to 131.77 to end the correction from 141.06.

Trading recommendation:

Our stop at 138.40 was hit for a nice little profit. Because of the split scenario decision, we will stay neutral and only sell a break below 133.27 or buy a break above 139.02.