The market has followed through on its bearish pattern so far by reversing all the recent gains and testing the 1872 level again. Given how this support level has been tested 4 times, any break could lead to a decisive move down. At the same time, if buyers can keep 1872 from breaking then we'll see another rally attempt next week. After all, economic conditions are fairly positive and this helps profits. The unemployment report came in at under 5%, a first since 2008. Most importantly, wages are increasing while gas prices are at the lowest in years which is ideal for a service oriented economy like ours. So while the stock market might continue to correct, the economy is doing well and that's what really matters in the long term. Same goes for the other "concern" on the Chinese economy. They're actually doing well as they are now officially a service oriented economy, the first time in its modern history but not many in the media have paid attention as they continue to focus on manufacturing numbers instead of services. Maybe markets will start reflecting their economies once bears run out of momentum.
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 = 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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