Sometimes a bold call is necessary and this is one. The market appears coiled to spring rapidly higher after a week of extreme ups and downs.
My conclusion is the January move upward was an aberration from euphoria over the Tax Bill passage. An otherwise expected 8% drop timed for January was slightly delayed until late in the month and carried to the expected lower target near 200 day sma. The euphoria led to a decline > 10% and a technical "correction."
A "V" shaped recovery likely began of the 2533 low on 2/9/18 and should start the next wave upward. It won't be straight to new highs and a pause at 2750 is expected.
Fear indicators are at extremes and lead to conditions for significant relief and upward price movement. MACD and RSI are shown with comparison to earlier declines. Anecdotal technical information and positioning reflects investor fear going into the weekend. Those positions and fears should ignite a sharp upward move when they prove unfounded and are unwound.
You were absolutely correct... right on your analysis so far for this week.... Do you still seeing retesting 200 SMA ? thank you for your input
iamthewolf
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@mialito77, Thanks. Next move will be a tough one and should be watched closely. I'll be publishing a look at the week of 2/20 on Saturday. I'm still working on it.
pipstrading, interesting question. In short you never know, but my first expectation is a start with some type of Gartley pattern (xabcd) where 2873-2533 is "xa" followed by "ab" where 2703 at 50% retrace is a reasonable estimate. Check current move behavior at .382, .5, .618 and maybe .764 in looking for the "bc" target. If "cd" is a higher low at retrace it is time for upward thrust.
mialito77
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@iamthewolf, You were absolutely correct... right on your analysis so far for this week.... Do you still seeing retesting 200 SMA ? thank you for your input
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pipstrading
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it looks like your wave 2 is a simple zig-zag, what kind of corrective wave 4 would u expect?