Coming Consolidation or Continued Advance.
By Bennett Tindle January 17th, 2020
If you’ve been following our work, you know we’ve been bullish US equity markets. In fact, some would say we’ve been overly optimistic regarding this rally, but our optimism has proven to be fruitful. We’ve achieved our initial upside targets in the S&P 500 and are staying long for the continuation into 3500 and beyond. Regardless of our long-term targets, we must be cognizant of the fact markets can’t continue in one direction forever, and periods of consolidation are ultimately healthy for the overall uptrend. We’ve been on a seemingly unstoppable move higher and have seen very few periods of consolidation following the October 3rd, 2019 lows, but we feel things are about to change! We now have evidence to suggest the trend is nearing an interim reversal as we can see the S&P 500 tracking out a clear ending diagonal pattern. Watch below to hear more.
We’ll be watching initial upside price action early in the week, at which point this pattern should come to completion and set us up for either our higher degree 4th wave correction, or a more shallow 2nd wave correction. Both scenarios will present a buying opportunity and offer investors an opportunity to redeploy capital into this period of expansion, as our higher degree trend implications remain valid!
Thanks for tuning in and we’ll see you next week!