The 50 DMA has proven to be difficult to breach and it looks like the bullish wave I was expecting started today. I posted the following on the ewaveanalytics.com site over the weekend and it pretty much summarizes the bottom line:
"Bears had an opportunity to bring down the market in the past 4 weeks but prices are still above the 50 DMA. And now that oscillators have reset, odds favor sentiment swinging towards the bullish side. Bears would need to bring the market under 2044 and close below this level to regain some control."
We still need price confirmation to officially label the current wave a W3. But unless the market is doing a flat zig zag, chances are new all time highs are coming as soon as this week. Oil sold off today but the stock market dismissed the move completely, which means oil could probably test its lows and the market will be looking the other way. As I've been saying for weeks, all these headlines on oil, Greece, etc. are just excuses for profit taking. Unfortunately, people who trade on news usually end up holding the bag. Take the front page on the WSJ today, which I just took a picture of. Just when oil tested its 50 DMA and this headline came out, prices plunged. I wish I could have saved some headlines when oil was at $43, but it was the complete opposite with doomers calling for $20 oil..
I am 100% sure a top will come eventually when a thing called a "recession" finally re-appears. But in an environment where the Fed is telling you they are going to raise rates, it pays off to respect the trend and trade with it.
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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