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SPX: for the S&P I’m counting the same expanded flat thing as for the DOW.
Target for a five wave ‘c’ is 3,570 which is almost a double top.
DOW: the DOW and SPX seem to be following a different route compared to NYA.
For the DOW there’s a possible expanded flat B wave where c=a at 28,660…
NYA: the route to 13,450 continues, and unless something else happens I have to assume this is what the market wants.
13,450 is about 1.88% above todays close.
NYA: strong rally while I was away on hols. Stronger than I expected.
For the NYA it’s *possible* that the big rising wedge continues with the current move being a five to the previous ‘perfect’ target of 13,450. Difficult to tell. This certainly looks and feels like a five, and interestingly c=a at exactly the 13,450 target.
Currently at 13,200 so it’s close.
DXY: the DXY has risen again as equity markets fall. The target remains the overlap at 95.7 but it can’t get there with a straight c=a. It might form a flat thing or triangle – that would also fit with a possible triangular b wave thing in the DOW and NYA.
Might not happen at all of course.
Germany, France and Belgium in full lockdown for a month, now followed by England.
100,000 new cases in America yesterday and accelerating.
Italy and Spain also seeing cases rise.
In the face of all this I cannot see markets rising and surely the economic damage will cause lower stock prices.
DOW: I am concerned that there is a large difference in projected bounce and downside between DOW and NYA. Doesn’t look right to me.
Recalculating for the DOW one can take a C=0.618 and project that upwards from the overlap at 24,785 giving 26,515. That then matches the NYA.
Very likely there is some sort of triangle or flat thing in store as shown on this chart. If so there will be multiple selling opportunities before wave C.
This is all guesswork of course but at least its a plan to monitor.
There’s a problem here with the FAAMGS. Throughout the virus rally the market has been driven higher by the FAAMGS to the extent that everyone is fully weighted or overweight. This week the FAAMGS produced excellent results in the main but the market looked for any excuse to sell. So the tone has changed from ‘buy the dips’ to ‘sell the rallies’. The FAAMGS appear to be ‘priced for perfection’ and probably have 10% to 20% downside from here. That will limit any rally attempts in the overall market.
DOW: however, for the DOW one must assume that yesterday’s low was completion of ‘wave A down’. It got to the 26,100 area target and bounced from the 200 MA twice.
Looking at the daily chart suggests we’ve had ‘A’ down from the top. The target is an ABC to overlap 24,785. Wave ‘A’ was 2,800 points so we can work upwards from the overlap target to give a ‘wave B’ rally target of 27,600 or so which would also fill the gap and overlap ‘wave a’.
In a perfect world that rally will now happen and take a while in order to create divergence (see chart). However the world isn’t perfect.
My plan here is to wait and see if any rally materialises and look to short at higher levels.
This latest drop is rather confusing and *might* be very negative for the markets.
Most indices reached their ‘C’ targets yesterday. Then we got a sharp bounce followed now by this new drop. It *might* be the end of ‘wave C’ but SPX has now exceeded my target area.
The bearish view is that the ‘bounce’ yesterday is all we are going to see for ‘big B’ and we have already entered ‘big C’ down. In which case we’ll get a 3, 4, 5 Monday/Tuesday.
I mentioned on this chart of NYA that the potential for a bounce was minimal. Is that it? Or do we have more of a bounce to come?
I don’t know and I don’t have a position.
I’m away for a few days holiday next week visiting the south-west lower corner of Korea by the Yellow Sea. I have a small profit this month (very small) and I’m happy to go away for a few days and review the situation when I return.
NYA and SPX reached their targets. DOW didn’t quite reach 26,100 but might have another try.
Usually I’d look for a rally to overlap wave ‘A’. However, looking at my NYA rising wedge chart I’ve got a problem with that.
You see the target at the “a” overlap. If we assume that we’ve had wave ‘A’ down and ‘C’ will be equal to ‘A’ there’s very little space for a rally (see blue lines on chart).
Yes, we can get a triangle thing which might have a sharp upwards move first, but there’s no guarantee of that.
