UPDATE ON THE BROAD STOCK MARKET (11:30 pm EDST)
We are now about to enter a very important reversal zone (Oct. 7 - 15), and our cycle labeling of the DOW and S&P 500 is still in question. It is starting to look like either one or both these indices started new medium-term cycles with their lows on Sept. 24. If that's the case, we should see more rallying to a sub-cycle top in this new reversal zone that would likely test the Sept. 3 high of 29,199 in the DOW and the Sept. 2 all-time high of 3,588 in the S&P 500. But there's still a chance that these indices will instead fall hard into this reversal zone to form a final bottom to an older cycle (which would be a good spot to buy). We will have to wait a few more days to see if this market wants to continue rallying or take a substantial correction now.
We are changing our labeling of the NASDAQ from an old cycle to a new medium-term cycle that started with the 10,520 low of Sept. 24. This means this index is at least short-term bullish and we should be looking for a corrective dip to buy. That may come in this new reversal zone, but if this market continues to rally, we may get a high instead, and we may have to wait a bit longer for a sub-cycle correction and a good buying opportunity.
Last week's announcement of President Trump's COVID-19 diagnosis sent the broad stock market down, but his quick recovery lifted the market back up yesterday. Today Mr.Trump announced that he would halt fiscal stimulus negotiations until after the election, and this has sent equities down again. Our trading strategies are on hold until this roller coaster settles down a bit and we can see if our new reversal zone is shaping up to be a top or a bottom.
Our longer-term view is still that we will see a major long-term cycle top soon (by the end of this year or possibly early 2021) which will be a major opportunity to sell short as the correction should be very substantial. Despite this bearish view, we could still see a strong short-term rally (possibly even a "blow-off') before that final top and thus opportunities to profit on the long side before the big sell-off. On the sidelines of this market for now.
We are now about to enter a very important reversal zone (Oct. 7 - 15), and our cycle labeling of the DOW and S&P 500 is still in question. It is starting to look like either one or both these indices started new medium-term cycles with their lows on Sept. 24. If that's the case, we should see more rallying to a sub-cycle top in this new reversal zone that would likely test the Sept. 3 high of 29,199 in the DOW and the Sept. 2 all-time high of 3,588 in the S&P 500. But there's still a chance that these indices will instead fall hard into this reversal zone to form a final bottom to an older cycle (which would be a good spot to buy). We will have to wait a few more days to see if this market wants to continue rallying or take a substantial correction now.
We are changing our labeling of the NASDAQ from an old cycle to a new medium-term cycle that started with the 10,520 low of Sept. 24. This means this index is at least short-term bullish and we should be looking for a corrective dip to buy. That may come in this new reversal zone, but if this market continues to rally, we may get a high instead, and we may have to wait a bit longer for a sub-cycle correction and a good buying opportunity.
Last week's announcement of President Trump's COVID-19 diagnosis sent the broad stock market down, but his quick recovery lifted the market back up yesterday. Today Mr.Trump announced that he would halt fiscal stimulus negotiations until after the election, and this has sent equities down again. Our trading strategies are on hold until this roller coaster settles down a bit and we can see if our new reversal zone is shaping up to be a top or a bottom.
Our longer-term view is still that we will see a major long-term cycle top soon (by the end of this year or possibly early 2021) which will be a major opportunity to sell short as the correction should be very substantial. Despite this bearish view, we could still see a strong short-term rally (possibly even a "blow-off') before that final top and thus opportunities to profit on the long side before the big sell-off. On the sidelines of this market for now.
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