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So we might see the Dow get to my 27500 perfect target (or not because the pattern might already be complete). Or we get several months of gentle decline to complete the irregular FLAT. Then, suddenly, all hell breaks loose and the markets head north with gusto to complete wave 5 of C at Dow 30,000 at which point it will be a massive short.
Bradley chart for 2020. Not always reliable. However, note the possibility of a sharp rise to Dow 30,000.
I think Trump is an extraordinarily clever person. He knows that one of the keys to getting re-elected is the level of the stock market. He has been vocal in telling the Fed to cut rates to get the markets higher. I think he will prolong the China situation for many months, forcing the Fed to cut perhaps a couple of 0.25 times. Then, at the end of this year or early next he’ll engineer a surprise trade deal. He’ll be hailed as a hero. With sightly lower rates and trade worries gone, the Dow will rush up to 30,000.
However all of this will instill inflationary pressure so after he’s elected again the Fed will have to start raising rates and then the market will be free to drop to 1811SPX. He’ll have four years to engineer a recovery back to higher levels, and he won’t be bothered about what happens in 2021.
Notice how in the big falling wedge scenario, wave ‘d’ overlaps wave ‘a’, which is what one would hope to see in a wedge situation.
And if a General Election is called, Brexit will have to be kicked down the road for another few months.
What’s interesting about the GBPEUR chart (and GBPUSD) is what could happen to prompt such a move downwards. The markets already know about the political changes, hard Brexit etc, so all of that is in the price. What *might* prompt a move is a General Election and fear of a Corbyn and/or Farage Government or a hung situation. I see mention of a General Election every day in the UK press, including the suggestion that as soon as Parliament returns with a new PM Labour will table a vote of ‘no confidence’ and request a general election. It’s that rather than Brexit that we should be looking for I think.
In extreme long term I think we are in the first stages of a very large rising wedge 5th wave that won’t end until the year 2030/2. Bull markets often end in a rising diagonal, and as this is the end of the bull run from 1906 (or 1932) we can expect a final rising wedge to take many years.
From the SPX 666 low I’m seeing a three wave advance ABC (with the middle B the pause at 2100/1811, now in wave C which should/needs to get to 3240. This large ABC is just wave A of a rising ABCDE wedge in to the years ahead. So for this to be valid the market must drop to overlap wave ‘A’ at 2100 at some point.
If I am right about a W4 FLAT in C, then SPX should reach 3003 then drop to 2650 to complete a flat with a truncated c wave. That will then complete W4 of C and afterwards looking for SPX 3240 for W5.
If all this comes to pass (hopeful/wishful) then in 2021 looking for a major collapse back to overlap 2100 and possibly as low as 1811.
Well I haven’t had a call from the Korean Government yet. Perhaps I need to remind them that I am an important and valuable import from England!
Watching the action in SPX. For several months I have had targets of SPX 3003 and/or 3040 based on several fib relationships and the concept of a FLAT 4 of C. The recent peak and ABC drop has got me a little confused. I still believe/hope that my target areas will be reached, and now watching for possible rising wedge thing to those targets.
Also watching the Dollar, DXY, EURKRW, USDKRW.
No positions open. Looking to short USDKRW at 1202/1210 if it gets there.
