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Friday, July 12, 2019

Inflection: A Look at the Long-term Bull Case vs. Bear Case


Last update noted that new a fourth wave could have completed on Tuesday, which implied new highs directly, and that's what happened.  We're going to take a break from the short-term today to examine the long-term in more detail.

Given the charts, it appears we're approaching a pretty significant inflection zone, which will likely either give bears a solid reprieve, or lead to a sustained resumption of the long-term bull rally.  Said another way:  If bears can't get anything done in the reasonably near future, we may see something approximating a redux of the relentless 2017 rally.

Let's look at the bull case first.  There are a couple ways to count this bullishly, and I've actually chosen the more conservative of the two to represent the bull count.  I mean, really, 10%, 30% -- what does it matter at this point?  If bulls push through here, then bears will probably just need to settle down for a while, and that's enough to know for now.


The first bear case option isn't anything new, and we've discussed it previously on several occasions -- the option for a massive expanded flat that leads back toward the December lows prior to a resumption of the rally and new highs.  (The second bear case of "alt: 5" is the "uber-bear" case.)



In conclusion, this appears to be a fairly important inflection zone for the intermediate term.  Since the trend (and thus the momentum) is presently up, bears have to treat that accordingly and await an impulsive decline before getting too excited.  As we always do, we'll track all that in real-time and burn that bridge when we come to it.  In the meantime, hopefully this helps people visualize where we currently seem to be in relation to the big picture.  Trade safe.

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