We had really prolonged c-wave drop — either a 4th wave or the start of A-wave down. The chart was not clear on the S&P, but is clearer on the Dow chart, shown below.
The size of this pullback has gone well beyond what I had expected – effectively wiping out the entire market hours rally from Wednesday. The drop lasted more than an entire 24 hours and even extended past midnight into Friday.
If the market rallied towards 2387 today and turned back down – that would be bearish.
But the market consolidated below the 2382 region that it closed on on March 2 — I’m seeing a series of 1-2’s – which seems more supportive of the pink wave 5 count.
The alternative is the blue count where it hits resistance in the 2383 – 2387 region and forms a bearish wave 1 down of a larger degree 4th wave.
As the market was pulling back yesterday – I had difficulty counting the waves on the S&P and Russell – it turns out the Dow had the cleanest 4th wave A-B-1-2-3-4-5 pattern
The blue count is the more bearish count -suggesting a local top at 1415 – and we are in the middle of an A-B-C to the downside. However, if this were a C-wave, then the consolidation we saw into the afternoon on Friday should not have happened. So it seems the market is trying to save itself – and with the 1380-1387 zone acting as support multiple times in the last 20 days or so, it’s possible that we had an A-B mountain consolidation pattern today that spiked at the open to 1400 only to drop back breaking lows – but then holding for the whole day.
In the imediate term, either a wave 2 or another A-B mountain should bring us a dip below 1390. If that 1389 region holds, it could turn back up. However, a break of 1385 would mean the 1394 top was a wave ii top and a wave iii down would complete the blue A-B-C wave 2 – but further below like 1370-1375 region before it turns back up.
I was previously expecting upwards movement with a retest of 1405 – but the market just krapped out – reversing the entire Trump rally completely
It looks like the pink prediction did not play out. Instead, the blue one played out – and we may have gotten either all of wave 2 down — or A of wave 2 down towards 1385
The Nasdaq appeared bullish during the Trump rally – however, on March 2 – the entire trump rally was entirely erased – and the market went below where it opened on March 1 – even overlapping into the territory prior to breakout. This is further than I expected and supports the bearish case.
However, the consolidation in Friday afternoon with continuous slow grind up is can potentially turn things around. Nasdaq was weaker on the pullback down, but it is relatively stronger on this most recent grind on Friday.
I was expecting a smaller-sized wave iv – that would go to maybe 2385 – but instead, the market went all the way down to 2372 — the size of the drop makes me think the local top could be in. However, the coiling action today in the upper 2370s seems to say otherwise. So within 24 hours I was bearish, then turned maybe bullish, so hard to say at the moment.
We exited half of our silver position on Feb 28 – a few days before the sudden drop on March 2.
Today’s Yellen speech initiated a drop, rally, pullback, and then rally. Immediate resistance is in the 18.05 region with a possible pullback to the 17.89 region.
Gold also had an A-B_C wave 2 pullback. This wave 2 might coincide with the bottom in gold miners – which has fallen a lot more than I expected, but still maintains longer term bullish prospects.
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