At the rate that this Nasdaq keeps pushing higher, Investors should be careful not to get their wings singed. Yesterday the Nasdaq peaked at about 7210 before it started into another decline. I show two trend lines, but they mean little as the markets spill well outside the top trend line. Due to the choppy pattern most of these patterns do not form between pretty trend lines, but they act more like zigzags.
I believe the run that started from the middle of last month is all part of a bigger diagonal 5th wave move, but we need more evidence that a bigger decline is coming. The earliest sign would be when the bottom trend line gets sliced in two. After that we have two price bottoms that need to get completely retraced. The February 9th bottom of 6200 ended with a set of diagonal 5 waves. We may have to wait until the Nasdaq falls to the February bottom, before we get all excited about the beginnings of a major bear market.
The longer this all takes to start, the steeper the angle of the decline should happen. Last month the solar cycle sunspot activity increased which also buys us more time before any early bottom solar cycle bottom.
The Gold/Nasdaq ratio managed to squeeze out another new record, smashing up against the 5:1 barrier 4-5 times this year already.
This acts like a brick wall on the bigger scope of things, and it will do the same when we get to the next major bottom. Just like the Nasdaq gave us a different 2000-2002 crash, this time I’m sure that the Nasdaq is going to give the wave counting crowd, surprises never encountered before. By charging too a new record high, the Nasdaq is now walking to a different drummer, again.
This forces me to start looking for a new set of 5 declining waves in the coming few weeks or so.
The SP500 and the Dow 30 are still well behind the Nasdaq, and Trump would have to pull off an amazing feat, to get those two to catch up to the Nasdaq.