Last week the DOW hit resistance about 3 times after which the investors started to panic again. I believe this could be a wave 1-2 in Minor degree, but the DOW needs to decline much further to show us that the stock bears are in control.
Friday ended with a sharp spike to the downside but we will see if that spike holds any serious price level.
We also finished a golden cross but it may mean nothing as a death cross could follow just as fast.
At this time the DOW has topped July 16 at the 27,396 price level. Even though many are looking for a major top, this market does a good job of aggravating the stock bears as it tries to keep pushing higher. We need more evidence that a top is in and by that, I mean another run to the downside would help with that.
There is a little line down at the 14,000 price level but don’t take that as some magical support for another huge bull market as 14,000 is just the minimum I would like to see the DOW hit for a Cycle degree low.
It could take until spring of 2021 as the elections could change the political landscape dramatically. Some may call this the election cycle and politicians do have an impact on the markets. We are in a world where a single “Tweet” could take down a country and false news dominates.
Millions of investors that have pushed the DOW vertically all have smart connections or advisors and so far the majority see no problem in the trade war, oil war, hyped-up climate change, and a host of other fears.
In short, stock investors don’t give a shit about fundamentals as long as the market keeps going up! Oh but wait, when the markets start to decline, then all the bearish news will matter and it will become front-page news again.
If you want to see trillions go up in smoke then just what what happens after the DOW slice through the 200-day MA. This 50-day, 200-day MA fits into my wave counting style extremely well as the Death Cross (DC) is a powerfull signal that shit is going to hit the fan. All those camplacant stock bulls have an ugly trip ahead of them because the bears are coming to shred every bull they can catch. A big bear in a pit of bulls, who do think will win? All the bear has to do is growl like crazy and you will see the stock bulls flee like a bunch of scared rabbits. All it takes is one bull group to bolt for the exits and you have an instant mini crash.
If there is one warning I can give in all the time I’ve been wave counting, you don’t want to be bullish in front of a potential Death Cross to come. We need a very small down plunge and the Death Cross is history. All that funny money they base their world on will come crashing down. Are you having fun yet, because for the short seller he will have a field day as he rides down the next leg of a bear market.
There is no support for anything in a Cycle degree crash, so let it fall. A world built on phony money and extreme debt does not get cleaned up with a simple correction it could take three years before the final bottom. Besides, maybe in the fall President Trump will order the trade wars over and and scream. “No More Taxes” The stock markets would turn and soar for huge gains.
In this crazy world anything is possible, but nothing will stop a decline once it starts rolling down hill. Gold has already had it’s daily chart Death Cross so everything is going to take a big hit in asset prices. I have only been using the 50-day 200-day MA a few months but it all depends how you use it that is more important. Needless to say it fits very well with Cycle degree wave counting, and I incorporated it into the Cycle degree wave counting method. The next many weeks is going to be critical as we should witness the DOW slow down and refuse to go higher.
The markets have rolled over very well, but who’s to say if this is all just another correction? With Janet Yellen about to speak this Friday, the markets could go nuts in both directions. Since several of the markets did not confirm the real top, there is always a chance another 4th wave could appear sending the markets flying. In the short term, definitely not for the long term. If the markets soar higher again, then this will still not kill any potential “D” wave top in Minor degree.
Besides the total failure of any support price level, we could be on an ending diagonal as well. If I move my degree levels up one degree, then the entire structure can turn into a zigzag diagonal 5th wave. It doesn’t get us any closer for a Cycle degree spot, but the more surprise bull rallies we get, it keeps opening up alternate wave counts. The trick is to dump the bad ones, as quickly as possible so not to waste our time trying to confirm something that will never happen.