A highly interesting move, the necessary preparation for the counter swing. Sellers are aiming to complete the ABC sequence and ideally sweep the lows into 2020 Elections. The main feature of interest to us is the role played by the latest protests and virus cases ticking higher. A "second wave" will act as another strong post / blockader between consumer confidence and the establishment. The cramping influence of social justice can very quickly turn into class warfare which polarises countries.
In the initial 'zig' part of the correction we analysed exchanges in DAX. In addition, we also exchanged the flows in VIX to avoid being forced into covering or retreating or to make a momentum-wasting attacking play (liquidating buyers stops with subsequent breakdowns).
Basically, Global Equities can be considered as a combination, as in any case we are in 'risk-on/risk-off' exchanges. In the "endgame" part of the correction the apparently desirable reopenings of the economy will act as opportunity for us to see the latest Robinhood traders money fall into our lap as if it were a ripe fruit. Just think back to our newly developed tsunami across the labour force:
The destruction goes much further because of its damage radius, the wide stretch of damage in confidence has created a territory which is centrally positioning consumers for a retracement after a decade long cycle. The simplest explanation would be the following 'Consumer Staples' diagram:
Here it is usually an ABC sequence which we are talking about: we have the choice of treating it with 3-5-3 zig and zag on both sides which mean soft hand buyers are now next to come under attack. The 🔑 point is that we will want to clear some at +/- 2570 initial target and leave the rest running for a destructive 2018 main swing.
Once we breakdown again there will be a psychologically difficult environment, it will create desirable swings for some cheap buying opportunities later in the year. Thanks as usual for keeping the support coming with likes, comments, charts and etc!
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