It is difficult to tell at this point if wave IV is continuing, or if this is wave 2 of V developing as an expanded flat. The index should not go above the 1230.71 high of August 31, and if it is in a wave IV triangle, this should take a couple more weeks to complete. If it is now in wave V, then wave 2 of V was an upward expanded flat, and there should be a steep decline next week as wave three down kicks in.
Either way, the main trend is still down.
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4 comments:
I spent a while digesting this, and looking at the chart. A question though, how does the FOMC meeting this week factor into your thinking?
Will they simply print, buy more long-dated bonds, open ever bigger swap lines with Euro banks...?
The Fed rocks the market more than any other factor now, imo. What say you?
how does the FOMC meeting this week factor into your thinking?
Actually, not at all. The idea is that the stock market moves to its own rhythms. External factors are assumed not not make any - or, at least, not much - difference.
I've been live-blogging the S&P 500 since the beginning of August, and have poked fun a few times at the idea that the market reacts to news events.
Of course, FOMC activities are not ordinary news events. They do affect the economy - though I've come to believe far less so than the common wisdom would have you believe. And the stock market is not the economy. It is its own thing, reacting to the ebb and flow of what is called social mood.
Cheers!
JzB
"It is its own thing, reacting to the ebb and flow of what is called social mood."
Now you have my attention. I will be following along...I really want to see how this plays out.
Any updates on FOMC?
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