OK, but what´s next?

There is some long term resistance around 12800, also the Dow stopped short of the internal trend line. I would be more comfortable if the index cross the line and it becomes support, that hasn’t come yet. We have a beautiful summation index, but you must remember is a bit lagging.



Wave U-V went from 10800 to 11645 for 845 points or almost 8%, if this wave was meant to be the biggest, the movement would have ended already around 12000.

Wave 1 on W-X is 550 points, wave 2 was a sharp 1 day correction of 207 points or an exactly 38 Fibonacci percent. Wave 3 still running is 557 points at Friday´s close. Hopefully the Dow will cross the internal trend line, if not, 11900 should act as support and the target for the end of the move will become clearer.


Mondays are the worst days of the week for the stock market, Fridays are the best so don’t be surprised if tomorrow the Dow closes low.
PS: Most of the times a compression of the moving averages gives us ample warning of a trend reversal, if that proves right you better let your profits run a little bit more.