There is no way to determine yet if this is a corrective off the high or a new larger degree downward trend.
Here is a chart of the Wilshire index. There has been a clear 5 waves down to complete either the larger degree 1st wave down or an A wave down of a corrective. We are now working on what appears to be either a wave 2 or the B wave of the corrective. The wave 2 or B wave will be composed of three smaller degree waves labeled a-b-c which should retrace 50-61.8% (could retrace 100% and still be a valid a-b-c pattern as long as it doesn't make a new high) of the drop from the high. Upon completion of the a-b-c pattern of the wave 2 or B wave there should be a drop below today's low which will be either a wave 3 or C wave.
There is no way to determine yet if this is a corrective off the high or a new larger degree downward trend.
There is no way to determine yet if this is a corrective off the high or a new larger degree downward trend.
Market is setting up to put in a top. May have just a slight more upward movement but should be done in the next day or two. The blue lines mark an expanding ending diagonal pattern. It is currently on the fifth wave of this pattern. There may be some overthrow above the blue line which is not uncommon for the fifth wave of this pattern.
C is currently working on completing the top of the right shoulder. The head and should pattern will be confirmed if the price breaks below the neckline.
The long term outlook for the dollar is very bullish. Below is a daily chart showing a short term target for the dollar highlighted in green. It's very possible the actual end to this short term rally may go past the target shown but should stay within the channel on the chart. The longer the rally is in time will allow for further movement up the channel.
The $SPXA50R is showing stocks to be highly overbought. When this is showing a reading of greater than 90%, there is a high level of risk in long positions. The market can still move higher but conditions are ripe for short-intermediate term trend change.
The Wilshire Index(this index has a broad representation of the market)is also approaching a level of resistance with the upper blue trend line. Whether the line holds remains to be seen but considering the level of bullishness in the market noted by the $SPXA50R, it would be fitting to see the Wilshire retreat.
The Wilshire Index(this index has a broad representation of the market)is also approaching a level of resistance with the upper blue trend line. Whether the line holds remains to be seen but considering the level of bullishness in the market noted by the $SPXA50R, it would be fitting to see the Wilshire retreat.
