The market started another correction today as I had been hoping but it's not certain if we will get follow though selling. Since the market started rallying couple of weeks ago at 1821, there has 6 similar corrective waves and not one of them evolved into a Zig Zags. So if the market manages to put in another lower low tomorrow, it will be the first "proper" corrective wave after this 10% rally. The headlines today focused on Oil's sell off, which finally reached the $77 level I had in mind for weeks (if not months), so we might see a counter rally there if $75 holds. Also, I am finally seeing some reasonable analysis on how beneficial the price of oil is to the US and other major economies as opposed to the bearish arguments few weeks ago. This drop in price is mainly due to the supply side, and $1 less at the pump translates into few hundred dollars per driver in the US every few months, so it is equivalent to an economic stimulus. I read an analysis today on the impact of $80 oil that predicts the US will see an additional 0.4% in growth in 2 years and almost 1% in China. And the more the world economy grows, the better we all live and the higher the markets go. The ones that get screwed are the oil producing countries and oil companies.
I am still holding to my hedge, so hope we'll see the 50 DMA tested to get out of it even or with a small profit.
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 = Bullish
Long Term Trend = Bullish
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