Market update

Posted: May 19, 2017 in Uncategorized

Market

After yesterday’s sell off, the market are bouncing back a little and it is only natural – after such a brutal wake-up from the steady market of the last months.
The gauge of volatility jumped by 40%!!
This radically changed the pattern of the market that, depending on events, could now range from a low drawdown (say ASX200: 5,600) to something more serious (say ASX200:5,150/5,200) between here and August.
It is very hard to see the market go past 6,000. Probably until the next US big move the market will be within ASX200:5,600-5,800
But the signal are flashing ORANGE and not RED – meaning that the pattern of the overall bull market is intact. In effect this drawdown is healthy and if we do not have an healthy drawdown that is where the real issues are starting.
The important number is actually SP500 2,359 (and the market closed just off it, 2365) as, in technical analysis, it is the neck of an inverse head and shoulder with target 2,420.
If that fail (which I expect to) the targets will be 2,330, 2250 and 2,200. And at the end 2,080 -the start of Trump rally
This would be still a nice small correction (10%+)and in some way needed not to cripple the entire bull market structure
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