The market had a volatile day today and ended up closing substantially down from yesterday. I assume the 1988 level will be challenged again (perhaps in pre-market?) and if that level doesn't hold, a test of the 200 DMA at 1975 is imminent. However, the waves remain choppy and unless we see a clean impulse to the downside, the market will stage a strong counter rally and break out of the Descending Broadening Triangle in place.
On the bullish side, oil's rally today is the best in almost 3 years (too bad my stops kicked in 2 days ago!) and another close over $46 on Monday will turn its Trend Average bullish, something that has not happened since June 2014 when it was $105. If the rally starts in oil, I expect its 50 DMA to be tested and that technically will bring support to energy components in the stock market. Sellers could hang on to the negative sentiment due to volatility and the lower than projected GDP numbers for the 4th Quarter to continue the sell off. But let's not forget that under current monetary policy, slow growth just means low interest rates for a longer time which is a plus for assets. So while the trend is bearish and sellers have the momentum, bears have to really prove their case by closing the market under 1975 as the long term trend remains bullish (which btw will be 3 years old next week).
Have a great weekend!
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Short Term Trend = Bearish
Medium Term Trend = Bearish
Long Term Trend = Bullish