Last week on one of my member live videos I pointed out to the attendees that European markets were currently at, or very close to their All-Time highs…whereas in the US, we’ve entered the technical definition of a stock market correction…(down 10%). If you’re so inclined to Google an economic calendar, it also appears the economic metrics like CPI, unemployment, etc… appear much better as well. There’s an old adage in the markets….”When the US sneezes, the global economy catches a cold”. However, at this very moment in time, the only thing that appears sick is the US. Maybe that changes with time. I suspect that will be the case…but in any event, one thing that is clear is that our stock market indices are signaling that whatever economic sickness is to be contracted, it will have originated here…in the United States.
That is certainly a new phenomenon.
For the past couple years I have been warning my members (and followers here on Trading View) of a long-term top in the stock markets. Week after week in my trading room, I have commented that I believe I have all constituent waves accounted for, to the best of my ability, to say with a high degree of confidence that a super-cycle wave (III) has topped.
What we have lacked is the price action to confirm that statement. This morning, I cannot tell you we have confirmation. That confirming probability only comes when price declines below the area of the wave 4 of one lesser degree. That area is outlined in the SPX daily chart entitled the “Must Hold Region”. We are not there yet, nor do I think price makes a bee-line there in one shot. Therefore, I am NOT in panic mode this morning because I do believe we need a retrace higher and only that retracement’s structure will inform us the higher probability of future price subdivisions….(higher or lower).
Panic is the necessary trader behavior needed to decline in such fashion as I believe a super cycle wave (IV) will start out. However personally, I do not think it’s today. Futures are red this morning and closer to the recent lows than last week…the headlines surrounding the stock market appear very negative…but as of this morning, the MACD indicator on intraday charts is saying this type of sentiment is getting slightly weaker and NOT making new lows.
Therefore, I continue to maintain the price and technical indications tell me a minor B is either currently underway, or will be confirmed in the short term. Until those parameters get flipped, I’ll reserve my panic (so to speak) for the c of (c) of intermediate (A) into the must hold region later this year… where it will probably be justified at that time.
Best to all,
Chris