As stated couple of weeks ago "Support and the TA were tested as expected and the strong reversal signals the beginning of another impulse towards the 2000 level". Today the 2000 level was finally reached and the bullish leg that started at 1810 is now 200 points long. Considering oil continues its climb towards the $40 level, equities could keep climbing despite rallying 11% from its February lows. Whether the index is able to re-capture and trade above the 200 DMA is the million dollar question. Personally, I lean towards this rally being the beginning of a LT W5 on the long term count posted a few weeks ago. Pessimism reached very high levels last month despite the economy being in a good shape, so fundamentally speaking this would be an ideal time for another multi-month rally to new all time highs to complete the count that started in March 2009. Perhaps history will repeat itself (like it happened with Bush in 2001) and we will see a major correction along with a recession in the first year of the next President.
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 = 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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