Great bullish signal, but we are not done going down yet IMO. This looks just like June 25-26. Big spike at the end of the day. Flat in aftermarket. Good sized drop the next day. Then we really get a chance to go back up.
I think this continued bullish trend of bushing the resistance of the channel is a very good sign for the month ahead. MU beats estimates which means tech was strong through the quarter. It is going to keep the S&P 500 afloat IMO. Housing sales are up, which is also good news. As long as Texas, Florida, and California don't screw things up with coronavirus that is.
consolidation all the way to 23 July??? that's a LOOONG time... any special reason for that?
Dr_Roboto
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@chocotraders, couple of reasons.
I did an analysis of uptrends vs down trends of large market moves as well as the motive vs corrective waves for this cycle. The average works out to be :
corrective wave time = 0.39 * motive wave time
It is not perfect, but has proven to be a very good estimate. I am looking at the entire time it took us to get to the recent highs of this cycle from the low in March. Based on that, it will take through most of July to finish the major consolidation cycle.
The other thing is going to be earnings reports and coronavirus cases over the next month. I expect earnings to be good relative to how bad they could be, but I also expect that their forward guidance will be weak especially given the rise in coronavirus cases. A lot of businesses where hit hard and it will show in their earnings. However, it also turns out that the core of the FAAMG stocks have their earnings in the July 23rd time frame. I expect that several of them will have great earnings and that will be the catalyst to launch us into the next motive wave that will last through the election.