"Basically, 2039 needs break for a stronger correction to begin"
This is a classic example of key support breaking and all hell breaking loose. The market had been supported by that key pivot all year long until it finally broke last week. And despite all the panic and hysteria, there was ample warning something was not right with the death cross in the DJIA and lower lows being put in weeks ago. This correction is lining up well with the LT W4 count and today's lows reached the target area I mentioned last week of 1820-1900. Looking at the short term count and support levels, I can see one more leg down to challenge 1820 since 1905 broke. I'll probably pick up some shares if 1820 gets tested to play the bounce. With that said, if you are planning to go long, watch those support levels and place your stops accordingly. Panic/Manic markets do not care about oscillators.
The catalysts for this sell off are a combination of rate hikes, China and oil. None which are fundamentally damaging to the economy imo (damaging to profits yes since it raises cost of capital to companies), so this is mainly a sentiment driven sell off. Rate hikes implies Fed's confidence in the economy, oil's low prices are essentially a tax cut for oil importing countries and China's 8-9% sell off is just panic selling unrelated to the overall health of its economy. In fact, I have some more money coming in (for my long term account) this month that I will be putting in China shares. The lower prices go, the more I can buy.
For further analysis on the NASDAQ, DJI, RUT, Gold, Silver and Oil please visit http://www.ewaveanalytics.com
Short Term Trend = Bearish
Medium Term Trend = Bearish
Long Term Trend = Bullish trend being challenged - change imminent
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