Elliott Wave: Week of 1/28/19 - (Team) Powell Put, Part II
Feeling more confident in in Central Banks now? Over in Europe the chatter is about delaying the start of Balance Sheet contraction due to economic weakness. Meanwhile, U.S. Federal Reserve bankers are piling on Chairman Powell's flip-flop (Powell Put I) from December tough-talk into sounds of a dove's cry. Not a Mic was spared as a parade of calls for slower "data dependent" rate considerations hit last week's headlines. Finally the WSJ let the cat out - that in less than a month's time FED Central Bankers went from "autopilot" to earlier termination of Balance Sheet reduction (or Team Powell Put II). We should all feel better now in the firm, confident, hands of the "data dependent" interpreters - yikes!
Meanwhile, Bulls remain blissful and look past the fact that Friday's SP500 closed slightly lower than the prior week. You may ask, what can go wrong? Government is back open, everyone seems certain that trade/tariffs with China will be resolved, and declines are met by immediate rally.
I'll take a stab (ok, guess) - Markets realize that, giddy with victory and prone to overreach, a more confident House can become more aggressive on reversing last year's tax cuts "for the wealthy and corporations." Why stop there? If a wall can be denied, then why not do the same for ratification of USAMC (NAFTA's replacement). Certainly would be attention grabbing on the way to 2020. Note: My concern begins and ends with how the market is impacted and not any political posture.
On the technical front nothing changed from last week's chart. Wave B is still in progress facing overhead resistance after slightly crossing above the 50d sma. Up above is a Fibonacci level near 2700 and then the 200d sma at 2741 (Friday's close). Some indicators I follow suggest a pause period with potential for further drift to complete wave "a" of wave B after a torrid rise since 12/26/18. In short, something for everyone as wave B's tend to be. Tough to navigate for short-term trades and nasty when they end.
We're approaching another informative point. For now watch the Fibonacci level and 200d sma as we sit above the 50d sma. Last week was the first full week of closing above that marker since the first week of October 2018.
Meanwhile, Bulls remain blissful and look past the fact that Friday's SP500 closed slightly lower than the prior week. You may ask, what can go wrong? Government is back open, everyone seems certain that trade/tariffs with China will be resolved, and declines are met by immediate rally.
I'll take a stab (ok, guess) - Markets realize that, giddy with victory and prone to overreach, a more confident House can become more aggressive on reversing last year's tax cuts "for the wealthy and corporations." Why stop there? If a wall can be denied, then why not do the same for ratification of USAMC (NAFTA's replacement). Certainly would be attention grabbing on the way to 2020. Note: My concern begins and ends with how the market is impacted and not any political posture.
On the technical front nothing changed from last week's chart. Wave B is still in progress facing overhead resistance after slightly crossing above the 50d sma. Up above is a Fibonacci level near 2700 and then the 200d sma at 2741 (Friday's close). Some indicators I follow suggest a pause period with potential for further drift to complete wave "a" of wave B after a torrid rise since 12/26/18. In short, something for everyone as wave B's tend to be. Tough to navigate for short-term trades and nasty when they end.
We're approaching another informative point. For now watch the Fibonacci level and 200d sma as we sit above the 50d sma. Last week was the first full week of closing above that marker since the first week of October 2018.