The reason for the doubt about the situation right now is because the DOW is making either a large falling wedge - which is a very bullish pattern that could explode higher - or it's making a bear flag - which is a very bearish pattern that could launch it lower by 1000 points.
So, you have to take what you have in front of you and try and decide which way to play it based on everything else you know. What do we know? Well technically, we're in a 5th wave clearly. The projection on that wave is about 7000. However, when you move out in a fibonacci time sequence to project when, it will happen (should) very quickly. Basically by the end of the week. Because though it's a 5th, many 5ths are 'flats', just not going lower in price but out in time instead. That's why the wedge looks to be forming. Short sellers are getting hit on any large percieved selloff. Just look at last week. One day it's down big, the next up big. Then down 200 in the morning suggesting a breakdown and then BAMM, 10 minutes later nearly even. So, that's telling you what I suggested that on this leg down, the big boys know it's a final wave of this larger potential A wave which means this time they can come in and buy full positions without risk of getting sold against by margined hedge funds.
The large moves you see against selloffs most likely are being caused by front running which in turn squeezes the shorts.
The play basically is either we get a short move down as a potential large hammer bottom to end this A wave which happens next week, or we break out of this wedge upward next week and that sets up a larger multi-month rally into summer on this B wave.
In either case, don't be short here unless it's just a hedge position which you plan on trading out of very quickly. The SPX could run to 1100 on this rally coming. The $SOX should be a leader in it.
AI
