The market was right in pricing in a favorable outcome over the weekend on Greece's bail out request and we got a substantial rally as expected. The Trend Average has turned bullish and the next important level to overcome is the 50 DMA at 2,100, which was tested today. Looking at the waves, I am labeling the current rally a W3 so it has plenty of room to go before any significant pullbacks. Trade under 2083 invalidates the 5 count but I doubt that level will be breached until the count completes. A possible target for the entire structure is 2,129 or a slight higher all time high based on the waves printed so far.
The bigger question is whether this is the beginning of a multi-week rally. As I said last week, as long as the 2039 was respected, the market had enough of a correction to start rallying now. And now that there are favorable news over Greece, a stabilized China and likely deal with Iran, bulls might just make a big run from here. I think this administration has not been exactly the best as far as foreign policy (not that the previous one was any better), but the deal with Iran makes a lot of sense. By allowing Iran to regain power lost to sanctions, it can serve as a counter-weight to the Jihadists in the region. The ideal scenario would be to unleash all those Iranian Shia militias on ISIS and let them sort it out. That way the US can finally step back for good. Just think what all that money spent on chasing imaginary weapons and "liberating" that area of the world (Arab regions in particular) could have done if it was spent right here on tax cuts, infrastructure, etc. I hope whoever gets elected next year will be better than the ones on the news lately.
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Short Term Trend = Bullish
Medium Term Trend = Bearish trend being challenged
Long Term Trend = Bullish
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