We expected a rally and we sure got one. We can make a case that we are heading back down right now or right after small gain on Tuesday as shown on the chart.
Short term there's some sentiment indicators showing sign of overbought requiring a pause to work the excess off. Then we reached the 61.8% retracement and a resistance line only to see the market backing down. The nature of the coming decline should tell us more but we are sticking to our outlook for the Dow to eventually move below 23400 with wave (c) = wave (a) at the 22200 level. Just keep in mind that is an idealized scenario. A less bearish outcome would be moving sideways within a contracting triangle.
Regardless of the prevailing scenarios, we still expect the market to start to trek higher later this spring. Bull markets don't end this way.
Thanks for reading
Short term there's some sentiment indicators showing sign of overbought requiring a pause to work the excess off. Then we reached the 61.8% retracement and a resistance line only to see the market backing down. The nature of the coming decline should tell us more but we are sticking to our outlook for the Dow to eventually move below 23400 with wave (c) = wave (a) at the 22200 level. Just keep in mind that is an idealized scenario. A less bearish outcome would be moving sideways within a contracting triangle.
Regardless of the prevailing scenarios, we still expect the market to start to trek higher later this spring. Bull markets don't end this way.
Thanks for reading
