I was looking at the individual stocks in the top-20 SPX list, and frankly, many of them can actually stage a good rally, but they can also go substantially down. The market is at a very important juncture, and I would prefer to see what the next week delivers before taking any action.
The most recent shape traced out starting Jan 20th looks very much like an ending wedge which by all rules is supposed to be quickly retraced in the downtrend.
If it goes down, then the rest of the EU stocks will do so as well. If we break above the prior high, then the labeling is wrong and we'll do it all over again. Given how the US stocks resist to any dip I will just wait and observe what happens next.
Agree, a critical juncture but I believe history is on the side of the bears.......1957 and 2000 to 2002......but central banks are more involved in supporting asset prices now than then. So, its a flip.
AndyM
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That's true - I also think the bearish resolution is much more likely. This recent low-volume rally is hardly sustainable, but central banks are the single most unpredictable event these days, so I'm being cautious.
Quantum_Maryland_Capital
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I'm keeping a few longs and will wait to see a change in structure before changing course. You can make a few points calling tops but I view the trend as my friend and will wait for aforementioned change in structure for the bigger play down. Watch 2020, 2026 and 2028......after that the air is very, very thin.
DanV
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I agree with your ending diagonal wave c top just before the Brexit vote. However, little puzzled why you have 3 wave swing of the low in Jan 2016 as wave 'A' and yet Feb low as tradingview.com/x/0kzYIfDV/wave 'B' and it appears to have 5 swigs.
My interpretation is that we have wave 'W' (3 swing drop) forming the low in Aug 2015, since when we have expanding flat abc (3-3-5) correction to upside completing in your ending diagonal for form wave 'X' high. Conclusion is that reversal to downside should follow soon. Here is the chart with DOW Ind which shows slightly different counts. Thankyou for sharing. image]
DanV
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AndyM
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I think there are too many overlaps in the Feb decline to qualify for an impulse. Nasdaq was tracing a clear impulse in its 5th wave down at the same time, but SPX in my view was doing something else.
DanV
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I agree, but the overlap would still be valid 5 wave impulse in expanding ending diagonal. Just a possibility.
Fitzndahyouwz
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There was no reason for the Spx to slam the breaks on where it did on Friday. I think the Bulls panicked and slammed the breaks on as shorts started setting up positions. I'm biased as I'm looking for the Spx to give back early this week.