As Allan notes, his (seemingly drug influenced) observation that Easter weekends are often turn-around weekends for uptrending markets should be researched rather than relied upon for investment decisions. Just saying. – Ilene
Courtesy of Allan
Below the DJIA Monthly chart with proposed big picture wave count, retracement and stochastic analysis.
DJIA Monthly
Easter weekend takes me back to the 1980’s, "BK" (before kids) days when as part of a yuppie couples community, we used to take these days off and drive down from Atlanta to the gulf coast, the Florida panhandle. Amid the usual suspects of substances and debauchery, I remember numerous weeks leading up to the Good Friday holiday where the market was running up, my coffers were full and these beach vacations were the best of times. But I also remember how time and time again, the market would turn right around these holiday beach trips and whether it be a stiff ABC correction or a more serious intermediate decline, the rest of the Spring season was never as sanguine as those days leading up to this particular weekend.
An observation, especially filled with melancholy memories of simpler, more buoyant times, doesn’t constitute a well researched empirical case for a top, but neither can I relegate it to the meaningless nostalgia bin, especially in the light of the above chart. The wave structure, retracement levels, overbought nature of the stochastic all come together, along with the season at hand, reminding me that a big picture bear market view is still out there to be reckoned with in one way or another.
The Monthly Trend Model is too slow to change to be of trading value here, but the Intermediate Trends, defined by the Daily and Weekly Trends, will provide the first clues that a worst case scenario is unfolding. Therein lies the beauty of trend following, we need only observe, identify and accept what the market gives us, a lesson decades in the making.
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Check out Allan’s site, and if you wish to subscribe, Allan is offering PSW readers a 25% discount. Click here for the discount. – Ilene
