In case you didn’t know 😉 the INDU has had 200 points swings over the past 3 days… Nice for day traders, but how to position yourself if you invest longer than 24hrs… Simple don’t panic/get emotional and let the numbers do the work for you. So who ever called all 3 days correctly deserves a metal IMHO. I called two out of three. Not shabby dare I say myself. My call for an irregular flat at 1978 (b-wave high, at 2019, exceeds the beginning of wave a -2011- and wave c ends where wave a ends: 1978) was correct on Wednesday, BUT on Thursday the market proofed that call entirely wrong. My bad. Thursday was not foreseen. However, my call to go long at 1978 was correct, only for a day though…. But, 2 days later you would be in the green already again… NUTS… I then had to quickly re-assess, while traveling abroad, dealing with a late taxi due to heavy traffic, and while canceling my stolen debit card all at the same time, and realized that we may instead be dealing with an expanded flat: b longer than a, and c ends well below a. Often wave-c relates to wave-a in this case as: c = 1.618x a. Well, since IMHO wave-a was 33 points, wave-b ended at 2019, wave-c would then end at 2019-1.618x 33 = 1965. And that’s what the SPX did, a 1966 low. I alerted my members of this possibility intra-day as well as posted this on Tony Caldaro’s block on Thursday: forewarned is forearmed. In addition, even if we count 2019 as a top, there are still only 3 waves down : 1978, 2099, 1966 (a, b, c). Given the overlapping nature so far (SPX back to 1984) it is hard to count this as a larger impulse, unless we are dealing with a set of nested 1st and 2nd waves, which the technicals however do not agree with. In addition, price has not yet broken below the long term trendline that has held price in check since 2012. Until then, the trend is your friend.
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Taking a look at the NYA, I suggest 3 days ago that it would 1) move back inside the bollinger bands (which it did on Wednesday), AND 2) that the wave down could extend to 1.618x a from wave b to around 10,700, albeit not required, which it almost did yesterday. So far, it bottomed at 10,719. All in all, with 3 waves down only so far the market now has to decide it’s final direction, which -once found- it will then keep for the next few months to come IMHO. Note that a break below SPX 1966 is of course bearish and means more downside ahead, whereas a break above 2011/2019 is bullish. Simple as that. Hence, for now I am still bullish, since it’s a bull market until proven otherwise and the market hasn’t proven anything bearish yet.
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