Welcome back to 2008! The bear is back with a vengeance!
The market sliced through so many previous levels in such a short time, that IMHO there is no doubt that we are back to the "glory days" of 2008 and a bear market is upon us. I was not sure that we had finished a complete impulse at the ATH, due to the structure of the 4 and 5 wave, but given how many levels we sliced through, there is no doubt now. We have started a wave down from the ATH, and the bigger problem is - it is a very nested wave. No wonder we went down so fast so quick, it seems we were (or still are!) in wave 3 of 3 of 3 down (of 1/A down).
At the moment, after all the emotion tied to this incredible decline and given the extreme reading of oversold conditions we get from RSI as well as other indicators, I am not very short term bearish. However, I believe the most important thing now for traders is to shift their approach - being a bear market, it is sell the rips time, no longer buy the dips. There will be rallies, huge ones at that.. Most vicious rallies occur during bear markets, as we know. But the main direction is now down and we do have a long way to go. Longer than many people expect.
At the moment, assuming that the ((3)) is completed, we might rally to put in a 4th wave. That wave should be more sideways, since the ((2)) looks sharp, retracing more than 50% of prior move. Given that we should still be in 3 going down, the typical retrace should be the 0,382 Fibonacci ratio - 10229. That is my first target. 2nd target sits at 0,5 Fib ratio and 10505. In anycase, any rally must be contained below the ((1)) low sitting just above 11.000.
The market sliced through so many previous levels in such a short time, that IMHO there is no doubt that we are back to the "glory days" of 2008 and a bear market is upon us. I was not sure that we had finished a complete impulse at the ATH, due to the structure of the 4 and 5 wave, but given how many levels we sliced through, there is no doubt now. We have started a wave down from the ATH, and the bigger problem is - it is a very nested wave. No wonder we went down so fast so quick, it seems we were (or still are!) in wave 3 of 3 of 3 down (of 1/A down).
At the moment, after all the emotion tied to this incredible decline and given the extreme reading of oversold conditions we get from RSI as well as other indicators, I am not very short term bearish. However, I believe the most important thing now for traders is to shift their approach - being a bear market, it is sell the rips time, no longer buy the dips. There will be rallies, huge ones at that.. Most vicious rallies occur during bear markets, as we know. But the main direction is now down and we do have a long way to go. Longer than many people expect.
At the moment, assuming that the ((3)) is completed, we might rally to put in a 4th wave. That wave should be more sideways, since the ((2)) looks sharp, retracing more than 50% of prior move. Given that we should still be in 3 going down, the typical retrace should be the 0,382 Fibonacci ratio - 10229. That is my first target. 2nd target sits at 0,5 Fib ratio and 10505. In anycase, any rally must be contained below the ((1)) low sitting just above 11.000.
