The market started to pullback today after finding a top at 1991. It is still too early to tell what sort of corrective waves are coming, but if the wave from 1991>1969 is a bearish W1 of an A, then the target is about 1945 or around the TA. However, if this is a simple ABC, then we're looking at 1960 as the end of a short term correction. I think it'd be better for the bullish case to make a stronger pullback to 1925, as sustainable rallies usually come after a good dose of fear. And now that QE is officially over and there is no sign of further QEs, maybe those traders who believe this market will crash because of the end of QE will start selling tomorrow? technically speaking, they should have started selling as soon as the news came out but maybe they're confused. I am glad the whole QE thing has been put to rest, as we will now find out if this policy was truly effective. If things are as stable as they seem, Bernanke will go down in history as an economic genius who saved the US from a depression. And he should get credit for it, given all the criticism he received during his tenure. I personally thank him or my cheap mortgage rates, we might not see rates this low again in decades.
Anyway, I will be lowering my stops to break even if the market goes below the 50 DMA and hopefully closing position at a profit on the TA test or at 1925.
For further analysis on the NASDAQ, DJI, RUT, Gold, Silver and Oil please visit http://www.ewaveanalytics.com
Short Term Trend = Bullish
Medium Term Trend = Bearish trend being challenged
Long Term Trend = Bullish
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