Going based on what patterns I have seen previously and my Elliott wave count. In addition, once an equity breaks out of its linear regression channel they always seem to come back at some point and test it for support. I also think that dropping all the way down to that level now seems too bearish. I am willing to guess we are about at the end of a Wave A and should see a nice bounce for Wave B to support buy the dippers. Then we should see a much more sustained and deeper correction for a Wave C for the channel test. Well, that is the best educated guess I think anyone can offer purely based on technicals. IMO, it just seems more likely than the idea that we are headed to 20,000.
1W
1D (21,50,100,200 day sma)
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Tuesday noon and we had a big bounce this morning, but still inside the regression down channel.
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Rally kept up most of the day, but it still closed inside the regression down channel. We need to see a follow through tomorrow to say the correction is over.
This would make sense since on the shorter time frames (the daily) A lot of big tech names are oversold and for further downside would likely cool that off with a relief rally catching bears off guard for a few days/weeks. This could happen as rotation from energy and financial sectors take profit allowing for a daily higher low and that money then coming into a good area on tech to buy the oversold readings. I see a lot of people trying to compare this to 2020, but we do not have the news as we had then also that dip buy on Friday was telling on volume. People are thinking tech is becoming attractive at these prices. during the 2020 sell off the second leg down didnt see the buying pressure like we did last Friday
stockpreacherman
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@Natestradamus, Solid thoughts. Stim money dropping will be interesting. I wonder if the market will look discounted or just scary to retail investors by then (who will probably be more interested in booking a trip to Cabo than the stock market at the end of March).
DaddySawbucks
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IDK if this is an ABC; feels impulsive and a third wave down starting real soon... megaphone will break down after 50% retracement from sell
Dr_Roboto
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@DaddySawbucks, Hard to know. This market went from irrationally bullish to resting the price to 6 months ago in just 2 weeks.
Some food for thought.
DaddySawbucks
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@Dr_Roboto, I see DJI double topping while techs tank. Divergence on huge scale. Rotation and flight to 'quality' before capitulation.