The market breezed through the 200 DMA as if it didn't exist in another very bullish day. I had expected the 200 DMA to be challenged in the best case scenario under the count I was posting but since the market is showing signs of a W3, I have to re-label the count. I mentioned the possibility of a very bullish count when the market bottomed at 1990 couple of weeks with this bottom as a W2. I figured after a 100+ point rally at that point, the more reasonable label would be a W4 for 1990. But it now looks like this current structure from 1871 is heading much higher before a significant correction. In fact, there is enough momentum to reach an all time high on this wave.
When the stronger correction was predicted in August (around the time the intermediate term turned bearish), I felt the 1820-1900 area served as a good area for a LT W4 to bottom. I expected the correction to take longer and perhaps challenge the 1820 level. But instead it seems the LT W4 was a one wave correction to 1867 as it now looks very unlikely we will see stronger sell offs in the near future. So my expectation is for the market to rally the rest of the year and perhaps most of 2016 as well. Interest rate hikes look even more unlikely now that the EU is hinting at more QE and China continues cutting RRR, these factors support a worldwide rally. So don't be surprised to see new all time highs now only in the US but in Europe and China.
I covered my shorts at the 200 DMA as planned and I am not shorting this until the new count is completed. In the meantime, I am hoping China continues to rally in what continues to look like the start of a W3. Maybe I'll get lucky and reach my retirement goal by summer 2016.
Have a great weekend!
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 = Bearish trend being challenged
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