The next domino to fall will be high yield credit, which has been sitting at or near all time lows lately. As for the stock market: last week saw another extreme in bullishness within the professional finance world.
-64.4% of investment advisors were bullish and just 13.5% bearish.
This is the largest divergence in over 30 years!
Maybe stocks will be the next domino to fall after all!
UPCOMING RISK EVENTS:
USD: Capacity Utilization Rate, Industrial Production m/m,
EUR: Final CPI y/y,
GBP: N/A.
JPY: N/A.
DOW JONES INDUSTRIALS
30 min
4 Hours
Daily
My Bias: market topping process completing
Wave Structure: Impulsive 5 wave structure, topping in an all time high.
Long term wave count: topping in wave (5)
The DOW has seen its first impulsive looking decline today after reaching another all time high at 26082. The price declined 300 points into the low of the session at 25708 a few moments ago. If the bear market is going to start here, this counts as a good start for sure. From here the key price action I am looking for is a clear five waves down off the high, followed by a clear three wave recovery to a lower high.
This must be visible on the hourly chart.
Certainly the extreme reading in investor bullishness fits well with today's sudden decline. Either way, this was overdue. For tomorrow; Lets concentrate on building a larger impulse wave to the downside from here, At that point we can get excited about the possibilities!
U.S CRUDE OIL30 min
4 Hours
Daily
My Bias: topping in a large correction wave [4].
Wave Structure: Double combination higher in wave [4] red.
Long term wave count: wave [4] target $63 - $70
Crude corrected off the high as expected today, the decline has not cleared up which of the current wave counts is actually correct. Its a bit of a puzzle, but I will lay out the options. The current operating count views the correction as either a running flat, or an expanding flat.
The expanding flat idea requires a break of support at 63.06 to be valid. Also, the alternate count shows a now complete impulse wave at todays low.
Waves (i) and (ii) grey are complete and wave (iii) should follow into the $66 handle.
For tomorrow:
A further rally off todays low at 63.39 will favor the alternate wave count. A further higher low above that level will also point to the more bullish alternate count.