This has been a long time coming and I am surprised that we got a rare B wave that exceeded the height of Wave V in our impulse up from the March lows. With that said, now is the time to be bearish as there is no more room to the upside as the C wave of B is looking to have completed. Remember that the B wave of an ABC correction can go above Wave V, up to 1.318% of wave A, which means that the upside is limited to roughly the 3340 range, since Wave A was quite deep. This doesn't look likely to happen, but its good to have in the back of the mind.
I still think that this impulse is Wave 1 of a new cycle, which means that we will want to look to go long after the C wave is complete as we will want to position ourselves for an upcoming Wave 3. As I have stated before, Wave 2 can retrace 100% of Wave 1, but that is unlikely to happen, but a target is between 50% and 61.8% of Wave 1. It is important to look at how Wave 2 behaves, since this will tell us how Wave 4 will behave in the future (for instance if Wave 2 is a simple correction, Wave 4 will be a complex correction and vice versa).
There are a few potential bearish catalysts coming, such as a widely assumed negative GDP report, Q2 earnings, Jerome Powel (JPoW) stressing that the economic recovery depends on containing the coronavirus while there aremassive coronavirus spikes in the US and around the world, etc. JPow even mentioned that there is new data from the end of June that suggests that an economic slowdown has occurred, although it may be a temporary thing, but he stressed uncertainty, which is a typically a bearish catalyst in itself.
Good luck and stay safe!
I still think that this impulse is Wave 1 of a new cycle, which means that we will want to look to go long after the C wave is complete as we will want to position ourselves for an upcoming Wave 3. As I have stated before, Wave 2 can retrace 100% of Wave 1, but that is unlikely to happen, but a target is between 50% and 61.8% of Wave 1. It is important to look at how Wave 2 behaves, since this will tell us how Wave 4 will behave in the future (for instance if Wave 2 is a simple correction, Wave 4 will be a complex correction and vice versa).
There are a few potential bearish catalysts coming, such as a widely assumed negative GDP report, Q2 earnings, Jerome Powel (JPoW) stressing that the economic recovery depends on containing the coronavirus while there aremassive coronavirus spikes in the US and around the world, etc. JPow even mentioned that there is new data from the end of June that suggests that an economic slowdown has occurred, although it may be a temporary thing, but he stressed uncertainty, which is a typically a bearish catalyst in itself.
Good luck and stay safe!
