SP500 Midcap E-Mini Update

This S&P Midcap bullish phase produced another wild ride to the upside. It looks like 5 waves up as the subdivisions were very small.  A single zigzag crash ending in December 2018 can make all this fit into a diagonal set of 5 waves down in Intermediate degree.

The Midcaps found resistance just a bit above the 200-day MA line which still leaves the Midcaps under the influence of a  Death Cross.  March can also give us fantastic turning times in both directions, but we have to have the patience for this to play out in the short-term.

I don’t have a big database on any Gold/Midcap ratios but today we are sitting at 1.48:1.

The commercial hedgers are still net short the S&P Midcaps but not by all that much. In other words they can swing to a net long position fairly quick.

 

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DJIA Daily Chart Death Cross Review

Since the December 26, 2018 crash low the DJIA exploded in an upward path that any sane wave counter would see five waves up and make a call that the Dow is heading to new record highs. Maybe?. The Death Cross at the 25,100 price level should give the stock bulls reason to pause as there is only a slim chance that a Golden Cross is still to come and even if a  Golden Cross did happen, it may only be a short-lived event.

Commercial hedgers are not all that deep with net short positions so counter rallies can happen.  I’m looking for a diagonal 5 waves down so another zigzag could play out, with the price traveling to a new record low.

Complete retracement will help to confirm that this stock rally was just another bear market rally.  This pushes any Primary degree “A” wave into the future and fear has a funny habit of creating mini-panics which can turbo charge any decline.

At 20:1 the Gold/DJIA ratio makes the DJIA still as expensive as ever so that alone keeps me from looking for bullish wave counts.

 

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