S&P 500
Updated
The index should start declining in the next few days. Fibonacci from Sep 21 and Nov 30 points to 2573 or 2626-2644 as the the most likely turning points. The market has been buoyant on the back of rising treasury yield. This cannot continue. We are likely to see a move higher to the higher Fibonacci level and then a quick reversal. At that time the market will be exhausted. Maybe a few more days of good news or just no news. Then on Friday something negative and more pessimism developing early next week.
Then what? My base case is that the current corrective wave is over and that we will continue down. However, corrective Elliott waves are often double or triple. I am basically saying that the index do not have to move all the way down to new lows. It could be stuck in a range for some time. Nevertheless, I am saying that the index should move down before this happens.
The news are very positive at the moment. The job-report last Friday was very positive, but the job openings this week were less optimistic. The talks with the Chinese are beginning, but that was expected anyway. Can hardly be a surprise that talks begin, but the market is grabbing for positive news. Also the oil is moving up strongly. Right now at the 24% retracement. The Saudis are cutting production more than expected so the price is not just adjusting to demand expectations. So there are a negative retort to almost any positive piece of news. Give it a few more days of feel good news and some bad news can become a spanner in the machinery. Notice how the poor GDP growth in Germany hardly influenced the DAX. The market wants to feel good right now after plunging in December.
Then what? My base case is that the current corrective wave is over and that we will continue down. However, corrective Elliott waves are often double or triple. I am basically saying that the index do not have to move all the way down to new lows. It could be stuck in a range for some time. Nevertheless, I am saying that the index should move down before this happens.
The news are very positive at the moment. The job-report last Friday was very positive, but the job openings this week were less optimistic. The talks with the Chinese are beginning, but that was expected anyway. Can hardly be a surprise that talks begin, but the market is grabbing for positive news. Also the oil is moving up strongly. Right now at the 24% retracement. The Saudis are cutting production more than expected so the price is not just adjusting to demand expectations. So there are a negative retort to almost any positive piece of news. Give it a few more days of feel good news and some bad news can become a spanner in the machinery. Notice how the poor GDP growth in Germany hardly influenced the DAX. The market wants to feel good right now after plunging in December.
Note
There is some weak but raw strength that wants to push the index up. Oil down, interest rates down and index grinds higher. This is money flow talking. This time I think backed up by psychology mostly and not necessary capital flows. I come to this conclusion by intuition after following the market for the last few days. Intuition can be dangerousNote
The index is opening strongly today. Index is moving towards 2026-2644. There isn't much news, but the China headlines tell no progress on the structural issues. The moon cycle is overdue. A quick move up and then declineNote
Last update. I give myself 2 out of 5.
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