Loading ...Market path into September
I would post charts, but I think we are now in the full narrative driven mania in the markets. In a couple comments I talked about markets and commodities going down into September with a steep and quick correction. With the dollar and bonds spiking up.
with the latest cpi this morning, I believe we will rally into next weeks FOMC meeting. The meeting minutes will likely highlight their conviction to maintaining rates at a minimum. This will likely start the downtrend. Followed by NVDIA reporting earnings on the 23rd of August. I believe this will be the start of a steep drop for a couple weeks.
I believe this drop could be accelerated if NVDIA decides to give an early warning to the market that it didn’t hit its double revenue target. There is no way this happened, and this guidance has been what has driven this market since April\May.
Would love to hear counter arguments!
“full narrative driven mania in the markets. In a couple comments I talked about markets and commodities going down into September with a steep and quick correction.”
I’m not sure the mania is (substantially) narrative driven. But I will certainly continue to ignore narrative commentary on why the market should do this or that. I stick to the math (behind the charts).
Not long ago, I posted an EW chart suggesting the potential for several wave 4,5 drops and recoveries at progressively larger degree ahead of a final top. Today’s reaction to a less than encouraging CPI uptick, underscores that call. My charts suggest we’re still in a whipsaw pattern for a relatively small w4.
September does appear to have potential for the next larger correction, as you properly called it. I would concur on that read. At my end, I’m seeing plenty of corrective potential ahead, but so far VOLUME has not kicked in at the levels needed to reverse course in a sustained way (to mark a major top). That’s not an EW thing, but I do use it to validate EW work done by others that I respect.
Is the top you mention, are predicting longer term than September? Further into the fall/winter?
What do you look at for volume? I really like that idea to try and identify a turning point!
Hi Gus … Re the “final” top, I can’t really anticipate with precision until we get nearer to its doorstep. I can anticipate windows, but it often takes confirmation after the event to confirm. In EW terms, we are always dealing with ALTs and shifting probabilities as new market data arrive.
Near term, I see another week for this small w4 … up to a month on the smaller w5 up, and the next large correction starting perhaps by late September. It still see the need for that, as of now.
Re volume, I constructed a proprietary version of an obscure volume indicator that most chartists have never even heard of, certainly never seen used. I use it on all time frames and its very helpful, but not perfect. But when in doubt, its reliable enough. The premise is that regime change requires institutional investors to change course, and their volume shows up. Sometimes even in advance as they edge toward the door on rallies.
Very interesting! Thanks.
Pretty much the situation summarized here WITH A CHART
https://pbs.twimg.com/media/F3Mmhu-aQAEFnkw?format=jpg&name=large
Two ALTS
Blue B … top is in, and 1, 2 underway
or
red iii and this is a corrective iv as abc.
Either way, short the F out of 2/b and then reassess.
2/b should be a standard zig zag. Nothing fancy.
h/t Dr. Arnout ter Shure