US Equities Alternative Bullish Hypothesis: In Primary EW 3?!Risk is terrific for both longs and shorts at this juncture; I am sidelined, patiently and prudently waiting.
In a previous idea I hypothesized a double bottom possibly in October. It is possible the markets are grinding out a near-term bottom at this consolidation zone now.
Markets hold tenaciously to this consolidation zone beneath ATH. The September pullback may be nothing more than an Intermediate wave 2 in a Primary Wave 3. We are near a Fibo retracement level off the Cup which seems to be supported, although support is illusionary and can break sharply and suddenly, making longs as risky as shorts.
Shorting is terrifically risky now, as delegates are in trade talks in China atm, as a single optimistic tweet could unleash coiled up Bullish energy at this level, possibly driving prices to new ATH in Nov/Dec and another mad January rally into a Primary Wave 5. Donald manipulates the financial markets, and he clearly needs it to be propped up to support his re-election campaign. Betting against the Donald has historically proven to be a poor risk.
Direction is highly uncertain at this point; it could break either way, but we saw in August after intense distribution the prices broke to upside. It is certainly possible the Bears have been ground out and equities are poised to move higher. October actually tends to be one of the more Bullish months on average, although most notable crashes and many corrections also have occurred at this time of year, giving it an undeserved bad rep; it is by no means a certain bet to expect another, after last year's savagery.
We do have a Cup and Handle clearly formed, and if this be truly the Handle, then the next move is continuation to upside, as depicted in this graph:
www.investopedia.com
I offer this idea as a precautionary tale to plungers; please FGS do not bet the farm on a further correction! I closed shorts today, as a massive rally could continue.
Any disappointment in global events will spark a selloff but optimism over trade could as easily drive prices to a new ATH. R/R is terrible now!
As always, this hypothesis is just another WAG, definitely NOT investment advice; trade at your own risk; GLTA!
