From Greed to Fear

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It was just yesterday when I managed to talk myself out of the less bullish scenario calling for a reversion move to the 50-dma, followed by a final move to the 3,400's.  But as of this morning, I see no other outcome.  The LAST thing a trader ought to do here is make a wild guess and jump in prematurely.

As seen in the chart, the $ES lost the VAL just an hour ago. It took 10 trading sessions to travel from the VAL to the VAH, and just two short ones to get back.  As long as humans vacillate between fear and greed, this will never change.  Now it's just a matter of waiting out the fear phase before jumping in.  If red waves a and c are to achieve equality this year, green wave 4 should end near 3201.

When people send me charts from other so-called technicians, and I don't see a triangle interpretation of the price action that unfolded from May 1st to October 3rd of last year, I simply toss them away as amateurish endeavors.  The Elliott Wave Theory is quite subjective, and in my opinion, it's worthless unless it's used in a broader analysis framework encompassing other technical analysis disciplines.  The triangle I've been touting for months has dire implications;  The theory states that the next move emanating from the triangle in the direction of the prevailing trend should be the last one, thereby ushering in a trend reversal.

Now use your imagination and come up with plausible reasons for the prospective trend reversal.  If the bull market is to end soon in the high 3400's, what would be the catalysts for a reversal?  I suspect the presidential election outcome won't be what the stock market is betting on, and should there be a recession, it would certainly be man-made in Washington, DC.  This would be a scenario that eventually wipes out all of the 2019-2020 gains. images/2020/20200127/20200127ES1.png


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