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It’s frustrating for me to have untold legions of people criticize me for being bullish here—cautious, to be sure, but yes, generally bullish—but I continue to believe this is only a correction. Now, part of that comes with the territory of having a big account, and putting myself out there, and I accept that. But I don’t easily tolerate emotional people screeching at me, making the flawed assumption that I’m being bullish just because. I have reasons, and I’ve elaborated on many of them recently, but I thought I would bring some of the thoughts together to defend my position to some degree, so that folks know that I am—for all of my many failings—actually attempting to be rational here.
I have more, but you get the idea here. I’m not simply shooting from the hip. I am acknowledging that none of this stuff points to a market top. And thus, so far as I can conclude in advance, this appears to be merely a correction. And now that raises a new question: how big and how long? Extremely hard for me to say.
I know that the vast majority of corrections in stock market history take on the appearance of a 3-swing structure of some kind.
And so, even at the January 24th low, I could see a 3-swing move on the S&P 500, like this:
Read more “Here’s My Thinking Here”
As you know, I have been viewing the S&P 500 as being within its “3rd of 3rd of 3rd,” which would result in us entering a knot of fours and fives sooner rather than later, but I may need to aim a bit higher, and I’ll point out a couple of reasons why.
The defense of the count I’ve been using on $ES is that we have these higher lows (green arrows) and some clear impulse waves (red arrows) and so that lets us nest ones and twos to our hearts’ delight.
Read more “I May Need to Adopt an Even More Aggressively Bullish Count for the Indices”
Alrighty, there are a lot of things I want to discuss, so I’ll just dive right in. We’re seeing some delicious selling, and so we need to ask: Is this it? And if not, then how serious is it? And I will try to address those in this article.
First, Is this it?. I don’t know yet, to be blunt. And as much of me that wants this to be it (because I am bearish by nature), I am not yet convinced that it is it. And I will present some evidence that questions whether this is really it.
Bitcoin
Now, for the Great Liquidity Thermometer, I have been warning that it risked failure and with it equity markets (e.g., here). The frustrating part has been that Bitcoin often leads, and I’ve been watching it closely for signs that it would give up that head and shoulders pattern neckline before equities took a bath, but it held on to that level for as long as humanly possibly before finally taking a bath concurrently with equities.
At any rate, it’s given given us something more of an actual plunge—finally—but now how does that plunge look? Well, on the one hand, we have no idea yet if it’s finished. It could still be well within the move. If it is, we will want to see much lower prices still, as the H&S pattern’s measured move is somewhere deep down around $12-22K. And yet, I will note two features of the plunge so far.
The first feature is the volume profile. Bitcoin’s little plunge so far has taken it (unsurprisingly) to a POC (point of control, red line, the price at which the greatest volume has traded in this timeframe) and it has a huge volume node it will need to work through in order to go lower:
Read more “So How Bad Are Things? Weekend Market Update”
Bitcoin is breaking down finally, but I would feel more confident about us being in a crash were oil following suit, and it continues to resist total failure. That said, I want to point out one technical feature in support of (at least) a bounce on $NQ.
A lot of people ask me why I use the 250-day EMA instead of some other number or moving average type, and here’s a good example of why.
While everybody is celebrating the Nasdaq 100’s loss of its 200-day simple moving average, note that we’ve actually come to rest on the 250-day exponential moving average (green arrow on the right). And note, too, that during a total lockdown of all world economies with the emergence of an unknown virus, we still mustered an 11% bounce off of this moving average before (green arrow on the left). Now, $ES is near an important trend line (here), and the Nasdaq is at this EMA, so, no promises, but the potential for at least a strong bounce seems to me to be present here.
$NQ‘s wave structure is a little clearer, as it’s given us two distinct drops out of that consolidation high we were in. And if this is a triangle 4th wave we’re in now (red degree), it, too, would support one more drop.