What Is Going To Happen Long-term With The Stock Market?
1: DAX: Looking at the weekly, you can clearly see what DAX has done. It doesn't take an EW expert to see that we just finished wave 4. Wave 3 ended at 13.362 (1.618) fib, which means this correction is a wave 4 correction. Our rule 1 was: If it broke Wave 1 which was at 8122 the wave structure would have been invalidated. But since it didn't, we are looking at wave 5 up to 17k DAX.
2. USOIL: The commodity, have been on a massive selloff the past weeks. Looking at the bigger picture we see that US OIL just finished it wave (E) formation down, which indicates that the selloff is done. Since we have finished this descending wedge pattern, it should now retrace and to atleast 40 usd and breakout of this wedge, meaning it would go above 100 USD in longterm.
3: VIX. VIX is at a really high spot right, while its nearly impossible to do EW count on vix, we can use other indicators such as RSI and CCI. RSI at the same levels as the peak of 2008. Also we have the CCI at 400 levels such as 2008. Which indicates that we are very likely to see a decrease in the selloff.
4: IWM. Which looks at the small-cap sector in the US, indicates that the selloff is an major ABC correction. We are currently undergoing the last C wave down and we are paying very close attention to the 1.618 fib at 93.08 USD. In extreme cases wave C can go for the 1.618 and coupled with the extreme pandemic and fear in the markets, I see why we went that far. in addition the selloff already went past the 0.5 fib, which is likely for C waves.
So what is there to come?
I think its very likely we will see a bounce coming in the next week or two. I dont think that we will sell off further. I expect 220 SPY to hold. Also in correlation with DAX we see that DAX will push up for a wave 5 to 17k. And since the market are in correlation with each other, we can correlate it with SPY. Spy will likely do a B wave up to 3100, while DAX at the same time push up to 17k. That is gonna be a very important level to look at, as we may expect a C wave down to 200 SPY there.
2. USOIL: The commodity, have been on a massive selloff the past weeks. Looking at the bigger picture we see that US OIL just finished it wave (E) formation down, which indicates that the selloff is done. Since we have finished this descending wedge pattern, it should now retrace and to atleast 40 usd and breakout of this wedge, meaning it would go above 100 USD in longterm.
3: VIX. VIX is at a really high spot right, while its nearly impossible to do EW count on vix, we can use other indicators such as RSI and CCI. RSI at the same levels as the peak of 2008. Also we have the CCI at 400 levels such as 2008. Which indicates that we are very likely to see a decrease in the selloff.
4: IWM. Which looks at the small-cap sector in the US, indicates that the selloff is an major ABC correction. We are currently undergoing the last C wave down and we are paying very close attention to the 1.618 fib at 93.08 USD. In extreme cases wave C can go for the 1.618 and coupled with the extreme pandemic and fear in the markets, I see why we went that far. in addition the selloff already went past the 0.5 fib, which is likely for C waves.
So what is there to come?
I think its very likely we will see a bounce coming in the next week or two. I dont think that we will sell off further. I expect 220 SPY to hold. Also in correlation with DAX we see that DAX will push up for a wave 5 to 17k. And since the market are in correlation with each other, we can correlate it with SPY. Spy will likely do a B wave up to 3100, while DAX at the same time push up to 17k. That is gonna be a very important level to look at, as we may expect a C wave down to 200 SPY there.
Trade closed: target reached