A lower low was made today and the most recent bullish set up has been eliminated. Still, the Nov 2019 low remains in place and it is a must hold level for the bullish case. If the market is able to re-capture the 50 DMA and eventually the Trend Average in the next few sessions it will be setting itself up for a Christmas rally. However, failure to trade over the TA will mean further downside in the next few weeks.
Oil has been trading around its $37 low and needs to stage a strong counter-rally soon or risk losing support and sell off to test its multi-year low of $32. The low in 2009 was due to demand side problems as economies were plunging into recessions and depressions. Today, the problem is entirely on the supply side as shale oil has dramatically increased supply. And it will be interesting to see how this ends up playing out as OPEC (specifically our "ally" Saudi Arabia) are refusing to cut production in order to drive North American shale oil companies out of business. The problem with that thinking is that as soon as prices go back up to $50 then shale oil companies will come back to the market. In the end, the typical American driver has saved around $800 dollars this year in gas so hopefully this will go on for a while. This number btw translates to about $180 billion into the pockets of consumers (just in the US) instead of oil companies and our friends in the Middle East. Whatever negative impact of low energy oil prices is more than made up by the savings we are enjoying as a whole.
For further analysis on the NASDAQ, DJI, RUT, Gold, Silver and Oil please visit http://www.ewaveanalytics.com
Short Term Trend = Bearish
Medium Term Trend = Bullish
Long Term Trend = Bearish trend being challenged
* Trends are not trade signals. Trends are posted for situational awareness only and does not take into account wave counts, technical or fundamental conditions of the market. While mechanically trading the posted trends is feasible, keep in mind that these are lagging indicators and as such are prone to whipsaws and I personally do not use nor recommend them to initiate or close positions in the market without taking into consideration other factors.
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