The market rallied today (along with oil) and a clean break of 1906-1908 resistance will most likely lead to a break out. Like I said yesterday, oil will probably be the driver for equities in the next few weeks and I do see signs of a bottom there as well. Also, it's worth noting that the Baltic Dry Index made a historical low today at 345, down from a high of 11,000+ in 2008. This index reflects the commodities shipping slow down, primarily as China has all the infrastructure it needs. Lastly, China made a lower low yesterday in its multi-month correction and the end of the sell off should be near in that market. Therefore, these bearish extremes are a contrarian sign that the worst for equities might be over. After all, economies continue to grow at a healthy pace and this oil issue is a manufactured bear market that ends up benefiting consumers in the end.
For further analysis on the NASDAQ, DJI, RUT, Gold, Silver and Oil please visit http://www.ewaveanalytics.com
Short Term Trend = Bearish trend being challenged
Medium Term Trend = Bearish
Long Term Trend = Bearish
* 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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