Abysmal day at Wall Street today. The markets started selling off before even opening and there was only a small attempt to recover in the middle of the day, but then we sold off again. But the markets do not go straight up. It goes in waves and after last week’s strong rally, we ran into significant resistance. It was obvious that we will pull back. One day of selling is not a deal breaker. It would be if it continues.
The longer-term outlook is bullish (by a longer-term I mean a bit longer than a mid-term but not as long as long-term… I know…silly). This means we will most likely continue trying to break above the resistance and rally a bit before we see a bigger pullback or even another 50% retracement. But if this outlook fails (for example the FED screws the markets up again this week, we will fall like a rock instead).
The Ichimoku chart improved better than it was last week. We now have all three bullish checkboxes marked. That means, if we clear the hurdles in front of us, we may expect a nice bullish move.
Today’s move didn’t follow the pattern, so let’s see if tomorrow will be any better. Tomorrow, we should see selling continue, but we may see some early bounce to recover the losses from today. We may also see the beginning of the FED meeting rally when investors will be rushing into the market prior to the FED’s announcement and selling afterward. We could go up to the POC of the weekly volume profile and bounce down from there. The price is below VWAP so I would expect selling to continue.
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