Aug 24, 2015
Update
Is this the beginning of a bear market or sharp correction in bull market to purge greed?
My opinion such moves do not last for too long. They are not sustainable because market players get scared way too fast and way too early for a bear market.
Bear markets does not start with 15% for three days. Such moves appear in the middle of a bear market not in the beginning. This is the behavior of a furious correction in bull market, which punish the bulls getting too greedy - three years without 10% correction is too much greed don't you think?
With the price action today 144 points drop (the maximum) and VIX 53, the probability that we are near to important low is even higher
and I think we are close to 40 week and 18 month cycle low (this should be the low for the year when we see it:).
Obviously counting crashes is not easy. Watching the next support level and the begging of the wedge.. some FIBO retracement. A few more days with this speed and 1800 as a target at the moment.
Here is visually what I am talking about. If history repeats - a bottom this or next week, sideway move for 2 months, move higher(the second leg of a bigger correction).
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Krasi, can you give an opinion on FXI and EEM? Any bottom in sight yet? How about USO? Thanks.
ReplyDeleteEEM - my long term view was another leg lower with the same size like the move from 2011 after the sideway move until 09.2014. It is playing out target around ~29. It looks like a synchronized bottom with the major indexes.
DeleteFXI - last time I wrote I would not touch it because of the bubble move in China. SSEC has one leg lower now the second lower is running. I would wait for SSEC 2750 and FXI 30 before to think about longs/taking profits on shorts.
USO - I am tracking oil and this move lower is no surprise if you have read the post "Long term". Now timing the bottom is difficult. It looks like relentless move lower... probably wave 3. It is difficult to call targets for USO it is just moving lower no pullbacks. I would wait for a bounce higher and lower low with divergence or higher low waves 4 and 5. But OIL/USO should be close to an important bottom - divergences on the weekly charts,EW the end of the move lower since 2013, 3 years cycle low.