The short term trend is now confirmed bearish so now we'll just have to see what sort of correction we are in. The count that I had been following basically ended on the day the market made the marginal high and technically is best to label it as a truncated 5th wave. I am expecting the market to test the 1290-1300 area fairly soon and if the market finds support there, we'll probably see a W2 end and then a start of a strong bullish wave to 1400. There are some EW counts that are calling for a market top. But the way I see it, this market is not pricing in earnings as much as it is pricing inflation and currency depreciation.
Today's sell off was attributed in part to concerns about oil prices and commodities. Basically, the same catalysts I've been writing about for over a month. And just like there were no concerns when oil was over $112 (and now there is at $105?), we'll probably see a bullish wave in equities along with oil, commodities and everything else priced in US dollars. As far as I am concerned, we are seeing profit taking and nothing more at this point.
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