Crazy buying the past few days and yet the steepness of the comeback only makes me realize just how bearish this market is. Fun fact... the FASTER bull rallies are, the more bearish the market is. Because it's all juice from short sellers covering which means short interest is high. Take a look at all the rallies we've had thusfar in this downtrend... they just keep getting steeper and steeper.
The index is trying to reclaim this .618 fibo and it could not be more important. A rejection from the prior channel will likely mean a new low on the way. More importantly... look at that overlay. That's the waveform of the 2009 recession which is ONE impulse wave since it was the final C in a double top flat. In this case, we'd be looking at that monster as the A wave of a correction (which already sends us to the midpoint in 2018) with B and C on deck.
So many people think this correction is a 5 wave 1-2-3-4-5 yet they don't see that what we're actually drawing is a giant diagonal with likely a MEAN wave 5 which was what the Great Recession was. A double top or similar at this .618 fibo would be devastating for the market and that could potentially mark the top of the fifth wave of a diagonal... which always overshoots its trendline and is an extended wave.
The index is trying to reclaim this .618 fibo and it could not be more important. A rejection from the prior channel will likely mean a new low on the way. More importantly... look at that overlay. That's the waveform of the 2009 recession which is ONE impulse wave since it was the final C in a double top flat. In this case, we'd be looking at that monster as the A wave of a correction (which already sends us to the midpoint in 2018) with B and C on deck.
So many people think this correction is a 5 wave 1-2-3-4-5 yet they don't see that what we're actually drawing is a giant diagonal with likely a MEAN wave 5 which was what the Great Recession was. A double top or similar at this .618 fibo would be devastating for the market and that could potentially mark the top of the fifth wave of a diagonal... which always overshoots its trendline and is an extended wave.
But just as the case when the Ukraine invasion was a buy the news event, the FOMC decision to not rug pull with a .50% hike should be treated as a sell the news event. I'm actually skewing neutral to bullish leading up to middle of March then flipping to bearish in search of new lows to end March. I'm still of the belief this rally will have no legs until consolidation happens near the prior low.