US 30 in Complex ABC Correction Wave
Updated
This is a complex ABC correction coming off the August highs. Did not quite get to the Gartley Fibo at 26268, but within 100 pts of it for Fibo 1.55 will have to do.
There is a clear corrective 5 wave impulse evident in the A down leg, which is an organized, complex actionary impulse (labeled 1-2-3-4-5). This is not like the WXY pattern we saw in early August, it's true corrective trend actionary impulse and will likely carry index to significantly lower levels. This represents early technical breakdown.
We are near the end of countertrend reactionary B wave, which challenged Fibo 0.786 and then again came up to 0.618 before falling back.
This is a bull trap reaction wave.
Most recently, thanks to the Donald, a third rally attempt Friday to reclaim the highs was crushed. Thanks be to Trumptweets!
Given the constant tweeting, ongoing trade uncertainty and most importantly, cash outflows from mutual funds as parents return from vacation and withdraw assets to pay for prep schools and new cars for their college kids, it seems unlikely the markets will rally high enough to challenge the August low-volume highs.
It's no secret; people take their money out of the markets in September because they want to spend it. Real simple- seasonality.
And what better time to cash out than at the alltime high?!
'A' wave carried Dow -362; B retraced 224 pts at Fibo 0.618; C will be rough, at least as deep as A length, quite possibly 1.618xA = -586, as low as index 25,335 (target zone).
Look for a weak rally attempt early in the week of 10 Sep; before tweet Friday a rally was starting up and it is likely the bulls will try again once more.
Look for H&S and ascending wedges as the market struggles to regain higher price levels to enter shorts. Short entry above 26000 will likely be profitable.
As always, I post these opinions purely for speculative amusement and education, this does not in any way constitute investment advice;
trade at your own risk!
Good luck!
There is a clear corrective 5 wave impulse evident in the A down leg, which is an organized, complex actionary impulse (labeled 1-2-3-4-5). This is not like the WXY pattern we saw in early August, it's true corrective trend actionary impulse and will likely carry index to significantly lower levels. This represents early technical breakdown.
We are near the end of countertrend reactionary B wave, which challenged Fibo 0.786 and then again came up to 0.618 before falling back.
This is a bull trap reaction wave.
Most recently, thanks to the Donald, a third rally attempt Friday to reclaim the highs was crushed. Thanks be to Trumptweets!
Given the constant tweeting, ongoing trade uncertainty and most importantly, cash outflows from mutual funds as parents return from vacation and withdraw assets to pay for prep schools and new cars for their college kids, it seems unlikely the markets will rally high enough to challenge the August low-volume highs.
It's no secret; people take their money out of the markets in September because they want to spend it. Real simple- seasonality.
And what better time to cash out than at the alltime high?!
'A' wave carried Dow -362; B retraced 224 pts at Fibo 0.618; C will be rough, at least as deep as A length, quite possibly 1.618xA = -586, as low as index 25,335 (target zone).
Look for a weak rally attempt early in the week of 10 Sep; before tweet Friday a rally was starting up and it is likely the bulls will try again once more.
Look for H&S and ascending wedges as the market struggles to regain higher price levels to enter shorts. Short entry above 26000 will likely be profitable.
As always, I post these opinions purely for speculative amusement and education, this does not in any way constitute investment advice;
trade at your own risk!
Good luck!
Trade active
Index made a perfect double top today. Could bull a tad higher before it breaks off.Trade active
Thanks again Trump! Those of use holding puts are especially grateful for your market manipulation. I wonder do you also hold puts in a secret Swiss account?!B wave is getting near the pivot. Reached 1.618 Fibo in the Gartley today at 26200.
Some contributors object that US 30 has to get to 26600 for a double top; this is not so; because: 1- two components, INTC and CAT are in bear territory (-20%); and 2- because of corporate share repurchases this year, index has shrunk nearly 3% after 1 trillion $ of buybacks. So 26200 today = 27260 2017 points, adjusted for capitalization shrinkage. In the past decade, US 30 cpa has shrunk 15% ! Ergo, we are already at a new all-time high, adjusted for market capitalization. SAnd P is not affected this way because the index calculation is weighted by shares outstanding. whereas US 30 is not (old-school rule).
usatoday.com/story/money/markets/2018/08/08/shrinking-dow-buybacks-and-401-k/924346002/
So how high is enough? Pretty close now. We have an exhaustion gap with tremendous (thanks again Donald!) volatility and static prices. My fibo suggests 26268 - 26288 as a possible high. It is a distinct possibilityu that we saw the high 9/14 at 26200. If not, we could see it early next week. Watch Sand P for retest of high 2919, possibly pushing to 2939 next week; when we get there, you know there we are. It will come off pretty hard after that, be ready. Good luck!
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