Friday, May 3, 2019

INDU, RUT and [BLANK] Updates

Last update discussed the potential that the Fed meeting, combined with technical resistance, at least had the potential to trigger some selling, and could even get the ball rolling on something more bearish.  Wednesday then saw a relatively strong sell-off, after the Fed announced that they would NOT be issuing a new series of $50,000 bills featuring Ben Bernanke's smiling visage.

At the moment, bears did make a stand -- but they still have some more work to do to create an impulsive decline.  As of right now, the decline is only three waves down, so it could be a simple ABC.  Let's start with INDU:

INDU's near-term chart shows the potential 3-wave structure clearly, and highlights the recent inflection zone.

Of note, RUT did complete the minimum necessary to validate the preferred count of April 1:

There's no SPX chart today, because StockCharts continues to be my arch-nemesis, deleting every annotation I put,, which makes updating the charts a frustrating chore that makes me want to use a hammer on my computer screen.  Frankly, INDU's structure is the most clear anyway, so it will probably make a better canary at the moment.

In conclusion, bears did turn the market down from the recent inflection point, which is about all they could have hoped for at this time -- but the market has since run into the downside inflection zone and bounced.  This means that bulls have the option to run it to new highs as long as yesterday's low holds.  If that low instead fails, then bears may have more fuel in the tank.  Trade safe.

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