Sir Armstrong wrote something more clear ...
ask-socrates.com
BlogTrading v Investing Share Market
QUESTION: Granted, you called the crash and the day of the low as on March 23rd and said there would be a bounce. Do you still think there will be a new low in the Dow but not the NASDAQ?
HH
ANSWER: Normally, for a market to reverse, the Bullish Reversals have to come down. That takes place only with a new low. That is the "norm" in how markets unfold. The real question is can the Dow reach the Bullish Reversal? There was a 40% bounce from the 1929 Crash. The Weekly Bullish was 32650. The rally into early 1930 had everyone convinced the low was in place. But the rally, indeed strong by 40%, could only reach 29720.
It all depends if you are a trader or an investor. Yes, the trader just wants to trade the bounce. That is when you should be looking at Socrates and the Daily and Weekly Bullish Reversals. For an investor, you should be interested in the trend. In that case, we need the confirmation that everything will align for the Sovereign Debt Crisis and the Monetary Crisis. In this instance, everything is coming unglued going into 2022. We are already witnessing the commodities and food shortages starting to emerge. This implies the long-term forecasts are correct.
On March 31, I made it clear on the private blog that a retest of support down to the 17200 area was possible if the Dow remained below 22900, which was technical resistance. Exceeding that allowed for a stronger bounce. This is just standard market movement after a normal crash.
However, elected its first Weekly Bullish from that low the week of 4/13, which the Dow still has not accomplished. As I have mentioned, we are looking at an amazing Paradigm Shift which is unprecedented since the Great Depression. The fact that the NASDAQ elected the Weekly Bullish strongly suggests that the low is in place there.
This certainly means we cannot discount the fact that the March 23rd low in the Dow could hold. That does not negate a retest. Assuming we see a new high this week on Wednesday or Friday, the hypothetical Weekly Bearish Reversal will most likely be generated in the 22900 area. That means that a weekly closing in the Dow below that could very signal the new low or a retest of the low.
Keep in mind that because the Dow is international, the key here will be the currency. Europe looks like death warmed over. It is only a question of when will the capital flows shift back and that will be the real rally. Then we look for a capital flight to private assets as capital flees bonds and then there is the risk that Europe will default by simply converting all debt to perpetual bonds that need not be rolled nor do they expire.
Therefore, if you are a trader, then just follow the arrays and reversals. If you are long to the long-term, that is an entirely different question. We have to still get through this immediate period. After May, we enter a different trend probably into July/August, then we have the chaos of the elections. The future is full of uncertainty for the balance of the year, so it is not likely that we are looking at some bullish period as people try to figure out what is actually unfolding. |
