All support for 2018 has now vanished with nothing but empty space below. It’s not completely empty as there are always some protective stops below. I’m sure that many are looking to get-out as the majority of analysts now call it a bear market. It’s always easy to call something in hindsight, but that is always too late. We are going to find out if the current crop of talking heads can pick the next strong bottom.
We still have a long way to go even thought we are getting some great looking spikes to the downside. It all looks good as a 5 wave run in Minor degree. Usually about 3 sets of 1-2 wave show up but the rest may never be seen as they are just to small. Right now I have 3 sets showing after wave 2 in Minor degree, so we should start to run into ending wave 3s. A quick scan of the commercial positions has not switched to the positive at this time but the spread is shrinking.
From 1987 to the January 2018 peak we have what is part of the 30-year cycle +1 year. I’m sure readers or investors want clarity but it’s the job of the markets to always confuse the majority every step of the way. The easiest group to fool are the modern wave analysts that have never experienced the 2008 crash and have never gone back in history to do their homework.
An example is the 2018 market that contains an expanded pattern. Not a single wave expert seems to see the same pattern, and ignoring this type of top will screw up the wave count forever. An expanded top gives us a huge look into the future that is hard to imagine at this time. The short version is that no matter how deep the entire bear market will get, eventually the market in question will rise and surpass the expanded part! For an example, if the Nasdaq ended just below 2000 then I would have no hesitation in calling that the Nasdaq will eventually go above 8000!
Mind you that could take several decades to accomplish. It may take into 2019 before we see a strong bottom in Primary degree, after which I will turn very bullish. When you see any wave analyst produce a wave 1-2 in Primary degree, you instantly know that these analysts are in a much higher degree than “all” the work on this blog.
All the components inside the Nasdaq are taking big hits with Apple being a prime example. I’m sure Warren Buffet is scratching his head as his investment in Apple gets shredded.
The Gold/Nasdaq ratio was at 4.8:1 today which is down from the extreme of 6.38:1 in September.
Commercials are net short but not by that much. This will change in the months ahead as they switch to long positions.