I Maintain a Bullish Bias, But Also Remain Open to Bearish Outcomes

I have previously discussed evidence that (at least so far) casts doubt on bear market hypotheses. There are some others that we can add to those now:

  1. The 3-wave move discussed in the article linked to above is now even more apparent on the U.S. indices than it was when that was written
  2. While the indices made new lows against the January 24th low, Bitcoin interestingly did not
  3. Off of the February 24th low, the indices have—apparently—made fairly impressive impulse waves

That said, the geopolitical events remain concerning, and we cannot yet fully comprehend all of the fallout—especially in the financial markets—from the sanctions many countries are imposing on Russia right now. Given those unknowns, I of course am open to recessionary forces coming on faster than leading data can get to us, but until I see even further market weakness, I remain inclined to the bullish view. Inclined does not mean drunk in love with all-time highs. I’ve just got to see what happens here.

So, for the time being, I suspect that the S&P 500 has produced a first impulse wave up in what could become a larger, 5-wave impulse. So, I’m looking at minor (green) 1 being in, and that we may be in the minor (green) 2. That should unfold in a 3-wave pullback that ideally gets to the orange box below, but may also go as low as the 2/24 low before the count is invalidated. So, if this is “a” of that move, we may get a rally (for the “b”), then another pullback (for blue “c”), then off to the races.

ES


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