The Case for a Bounce
Context is ALL. Please check out my FEB. 3rd POST, Am I Being Alarmist
The piece examines a very long term Elliott Wave count that is complete at the highs of last January,
along with downside targets etc. The downside targets were roughly 4000 and 3000 but it was very early days in the development of the structure.
There WAS a pretty good bounce off the 4100 area in mid March.
Right, what now though? Contrarians Delight. Bloomberg reports Capitulation Etc
Serious consensus. Not to mention the weekends "Dollar Doom Loop" stuff.
It s subtle, but note the RSI positive divergence.
I count a likely a,b,c down with c= 1.618 of a, and a .236 Fib pull back of the ENTIRE market (using ES) at the lows.
Also notice the generally higher volume levels seen at big buy inflection point opportunities in this market.
Don t get me wrong, I m still an Alarmist, just thinking a 50% retrace of the first a,b,c structure down could be in the cards at this point.
Also IF you are a believer in the long term hold approach to investing, this isn t a bad place to start dollar cost averaging assuming the FED would come to the rescue if it goes down another 25%.
Have fun and don t trust anything I have to say.
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