But among the three high priests of EW theory I follow, most believe we experienced a negligible correction and are now in the fifth wave leading to a minor 5, a major III or something similar.
2175/2176 proved to be an obstacle for the reason noted on the chart and the market, seemingly, corrected through time rather than price although we did see a minor pullback on Thursday after tagging 2175.63 on Wednesday.
While skeptical, I will reluctantly believe it once we convincingly clear 2177………a major EW derived from the highs of this year and the lows of last year. And 2186 appears as an obstacle as well.
Assuming these levels are taken out, the next target area ranges from 2202 to 2225, the latter a round determined by the channel line.
And within this range, three numbers are of notable interest: 2206, 2212 and 2221. Plus, 2200 should be a psychological as well.
I think the market is extended for a host of reasons including the belief among analysts who now expect Q3 will decline, making for six consecutive quarterly declines in while global economic uncertainty is rising.
But as long as central banks increase the pool of liquidity and incremental increases find their way into the market, my concerns are literally wiped off the radar screen.
The ECB this past week disappointed on Thursday and the G20 statement issued today is long on words but short on concrete measures, making the Fed Announcement on Wednesday and BOJ statement Friday significant events for an uncertain and liquidity driven market.