This chart shows the last 10 years and all the non-horizontal breaks that occurred on the weekly after an ABC correction. (ABC corrections are defined as an ATH (all time high), followed by a lower low, followed by a lower high and then a final lower low.)
The RUT (Russell) broke its non-horizontal trend line last week. You can also make the case the DJI (Dow) did the same but the topping process was more rounded so not as clean as the charts for the SPX & RUT.
NDX (Nasdaq) had a choppy ATH and therefore you cannot draw the same non-horizontal line connecting the ATH. NDX must get back above 15K and stay above it.
There are certainly no guarantees and the market doesn't just go straight up so IMO the scenarios from here is that we backtest this purple line and as long as we don't have a weekly close below it then it remains a buy. We also might not backtest the purple line as you can see sometimes it just goes...
Near term, the MOST IMPORTANT task for the bulls is to keep weekly closings ABOVE the purple line!!! If we close next week below the purple line I will be scratching my head and stopped out!
As long as we stay above the purple line, the next important task for the bulls is to close above "B" (which is roughly 4550); backtest (or not) and then continue.
The RUT (Russell) broke its non-horizontal trend line last week. You can also make the case the DJI (Dow) did the same but the topping process was more rounded so not as clean as the charts for the SPX & RUT.
NDX (Nasdaq) had a choppy ATH and therefore you cannot draw the same non-horizontal line connecting the ATH. NDX must get back above 15K and stay above it.
There are certainly no guarantees and the market doesn't just go straight up so IMO the scenarios from here is that we backtest this purple line and as long as we don't have a weekly close below it then it remains a buy. We also might not backtest the purple line as you can see sometimes it just goes...
Near term, the MOST IMPORTANT task for the bulls is to keep weekly closings ABOVE the purple line!!! If we close next week below the purple line I will be scratching my head and stopped out!
As long as we stay above the purple line, the next important task for the bulls is to close above "B" (which is roughly 4550); backtest (or not) and then continue.
Comment:
In hindsight, the 3740ish area was a huge area for the bulls to defend as it was the 1/2 back within the channel! Still can't believe It took less than 2 year to go from the bottom of the range to the top of the range of a 20 year channel ...that's some crazy, crazy movement!
Comment:
We closed back inside the non-horizontal trend line soooo this time it is different! Powell started his today's speech with "Today my remarks will be shorter, my focus narrower and my message more direct." He was direct and to the point...no pivot.