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We all know markets excite. They can cause stress. They can cause eustress (the "good" kind of stress). It’s a fine line.
But rarely have I seen market so delicately balanced and opinions so divided.
There seems to be three camps. Those that reckon we have yet to see the real low – that is, there is more tough medicine we have to swallow. Then there’s the camp that has jumped in with eagerness in the last few days and filled their boots with oversold stocks. And then there are those of you that have gone into hiding and put your hands over your eyes, frozen into inactivity.
Why the divergence of opinion? Take a look at the 90-day ProfitSource Elliot chart:
click chart for more detail
Will the Wave Four rally prove to be a dead cat bounce and the Wave Five low be seen by month’s end? Or will the Wave Four rally in fact prove to be the start – as often happens – of the new Wave Five of a Wave Five upward movement? If you were to look at a 120 day Elliott you would see that this is a real possibility.
Clear as mud? Well that is the lure of the market!
Enjoy the ride!
Tom Scollon
Chief Analyst
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