Running with the bulls can wear you out, so the bulls are taking a bit of down time as they run in the opposite direction. The question is how far south will the run? The May run sure looks like an impulse to run as 5 waves have completed. Short term we are still faced with violent moves in both directions, blowing us a lot of smoke to keep any real trend hidden. Eventually the smoke will clear as violent moves (volatility) is very normal when a major change in trend is in progress. We have a wedge forming as well, so the bottom base of 23,400 has been hit 4-5 times.
We know that “sell” stops are all piling up below this price level, so when that fails the bulls might just capitulate in the short term. The DJIA is starting to look more like the SP500, but short term any run like this can just correct and resume its charge back up. I think the short term 24.300 price level will tell us more as that is where I would expect another turning to occur. This may take all week to clear up. Today is the new moon day and many times this can produce strong reversals. I just don’t see crude oil heading north as the DJIA heads south. In 2008 everything crashed together, oil, gold & silver, gold stocks and all the other indices around the world. 11 years later we are faced with the same setup, but also with many asset classes being at different stages in any crash.
Gold and oil also made some major moves this morning so I will cover that today as well. I will keep most of my intraday chart analysis between Tuesdays and Fridays as I have to keep my attention on the big trends first. Any wave analyst can produce you all sorts of numbers and letters giving you short term trade setups. Short term trade setups mean nothing, if we miss the biggest bear or any of the big bull markets. The reason short term day traders are everywhere, is because they have no clue what the big trend is that we may be in.
Like Jim Rogers says, ” A big bear market is coming” and it could take a lot of other asset classes with it.