US30 Likely Bearish Turn, But Maybe Only Briefly
For the immediate future, there are a confluence of different wave counts on all the indices that suggest a likely retracement from today's high (or possibly one more high). How deep that retracement will go requires a more subjective estimate at this point.
On the US30, the retracement from the Nov-8 high to the Dec-1 low could be seen as either a 5-wave impulse or a 3-wave correction. If interpreted as 3 waves, that correction should be over. We would still expect a temporary retracement to correct a portion of the Dec-1 to Dec-8 rally, but this should not break below 34k.
Alternatively, if taken as an impulse (see below image), we would expect another leg down at least to the Dec-1 low, and likely lower, to bring blue (C) to equality with blue (A).
When looking at the US30 alone, I like this (A) leg (below image) as an impulse more than a 3-wave move (above image). However, the other indices are all much clearer in having likely completed a 3-wave move in this period. Not only are their wave structures clearer, but those waves have met the ideal Fib targets. This leads me to lean toward the more bullish interpretation that this next pullback in US30 is likely to come up short of the Dec-1 low.
Either way, for the short term (day or two) the confluence is likely bearish, and in the longer term it's bullish going into 2022. The overall direction of the next week or two is less clear.
On the US30, the retracement from the Nov-8 high to the Dec-1 low could be seen as either a 5-wave impulse or a 3-wave correction. If interpreted as 3 waves, that correction should be over. We would still expect a temporary retracement to correct a portion of the Dec-1 to Dec-8 rally, but this should not break below 34k.
Alternatively, if taken as an impulse (see below image), we would expect another leg down at least to the Dec-1 low, and likely lower, to bring blue (C) to equality with blue (A).
When looking at the US30 alone, I like this (A) leg (below image) as an impulse more than a 3-wave move (above image). However, the other indices are all much clearer in having likely completed a 3-wave move in this period. Not only are their wave structures clearer, but those waves have met the ideal Fib targets. This leads me to lean toward the more bullish interpretation that this next pullback in US30 is likely to come up short of the Dec-1 low.
Either way, for the short term (day or two) the confluence is likely bearish, and in the longer term it's bullish going into 2022. The overall direction of the next week or two is less clear.
