The market finally did a proper 50 DMA test today by going briefly under it before rising for most of the day. The close sets up a potential small Inverse and Head & Shoulders that targets 2080 more or less. Not sure if the multi-week correction is over yet but the bounce allows for a low risk trade. So I went long at the left shoulder level with the 2039 low as the stop.
It's currently hard to see an economic recession that will bring down the stock market given the current economic momentum and how low interest rates are. So maybe there will be one or two more years of good times? Someone actually just called me to offer me a 3.5% refi loan which I am going to take given how ridiculously low this is. In fact, instead of paying off my home loan as I originally was planning to do later this year, I might use that money and buy another house to rent out to wealthy techies or vacationers. Since our state deliberately passed legislation to raise minimum wages to $15 an hour (a 50% raise without any economic research apparently by our brilliant leftist state politicians), I predict rents will rise substantially among lower income areas which will indirectly push up all other areas. So owning real estate is a particularly good bet at this time. What most people don't get is that they are not getting a 50% raise in purchasing power, they're getting a nominal 50% raise that will translate into a spike in inflation. Anyone who is smart enough to hire people, is smart enough to pass on costs to consumers.
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 = Bearish
Medium Term Trend = Bullish
Long Term Trend = Bullish
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