As much as I believe in "Don't Fight The Fed", I'm starting to think the bottom for the US markets (Technology/SPY/QQQ) may be much closer than some people think.
My cycle research suggests a 2022.5 cycle pattern (late in the second half of 2022) is highly likely. Have we seen that yet? Maybe. Maybe it is the recent bottom in June 2022 and the change of direction (higher) after that bottom.
Here are some of the KEY CYCLE PATTERNS that catch my attention.
9-27~10-8 : Harami, CRUSH, Gap, Top, Consolidation, Temp Bottom, Gap Reversal, Breakdown, Breakaway, Rally, Carryover, Bottom
10-11~10-25: Inside/Breakaway, Harami, CRUSH, GAP, Gap Reversal, Breakdown, Breakaway, Carryover, Temp Bottom, Top/Resistance, Consolidation, CRUSH, GAP, BIG GAP
These patterns, and the fact that I'm seeing some strength in the consumer sector, align with a potential Elliot Wave setup that suggests we may see some extreme volatility as we shift into a moderate Christmas Rally Phase.
It all depends on HOW DEEP (if anything) we see the markets move after the Fed rate decision. If the markets fall back into bullish trending and attempt to move away from lower support levels, then there is a very solid chance we may see an extended Bullish price trend starting a new Christmas Rally phase - possibly lasting into Q1:2023.
The CRUSH patterns are the only thing that concerns me. These are typically very aggressive downward price moves - but can sometimes represent pullbacks in an uptrend. I've seen them happen in very strong uptrends and I'm thinking capital may be shifting away from the same risks that were in the markets in late 2021. We've seen technology and other sectors fall 45% to 76% in some cases.
The contrarian trade (bullish if support holds) may be a very low risk trade right now.
My cycle research suggests a 2022.5 cycle pattern (late in the second half of 2022) is highly likely. Have we seen that yet? Maybe. Maybe it is the recent bottom in June 2022 and the change of direction (higher) after that bottom.
Here are some of the KEY CYCLE PATTERNS that catch my attention.
9-27~10-8 : Harami, CRUSH, Gap, Top, Consolidation, Temp Bottom, Gap Reversal, Breakdown, Breakaway, Rally, Carryover, Bottom
10-11~10-25: Inside/Breakaway, Harami, CRUSH, GAP, Gap Reversal, Breakdown, Breakaway, Carryover, Temp Bottom, Top/Resistance, Consolidation, CRUSH, GAP, BIG GAP
These patterns, and the fact that I'm seeing some strength in the consumer sector, align with a potential Elliot Wave setup that suggests we may see some extreme volatility as we shift into a moderate Christmas Rally Phase.
It all depends on HOW DEEP (if anything) we see the markets move after the Fed rate decision. If the markets fall back into bullish trending and attempt to move away from lower support levels, then there is a very solid chance we may see an extended Bullish price trend starting a new Christmas Rally phase - possibly lasting into Q1:2023.
The CRUSH patterns are the only thing that concerns me. These are typically very aggressive downward price moves - but can sometimes represent pullbacks in an uptrend. I've seen them happen in very strong uptrends and I'm thinking capital may be shifting away from the same risks that were in the markets in late 2021. We've seen technology and other sectors fall 45% to 76% in some cases.
The contrarian trade (bullish if support holds) may be a very low risk trade right now.
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www.tradetank.com
Follow me on Twitter, Youtube, TradingView, Others
www.youtube.com/channel/UCjjblvO7QRPKx2GcrVcoSgQ
twitter.com/BradMatheny33