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We are starting to see some jitters at the top of this recent run and the question is: ‘What sort of pullback will we have?’ A dip, a retreat, a pullback or a reversal? These have been defined in previous articles.
Let’s look firstly at the 90-day Elliott with Oscillator:
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This suggests an April pullback with three possible levels. The Oscillator has already retreated but the market has not pulled back much by comparison, which suggests we may see a very mild retreat. Indeed, the same chart for the DOW indicates the retreat could be near complete:
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Based on these charts we can conclude that we are still in a strong - albeit recently jittery - market.
But we need to look further out with a 90-week Elliott or 300-day Elliott. These both provide a longer term view, albeit with slightly different perpsecives. I prefer the latter, as follows:
For the XAO:
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And the DOW:
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The Australian market could experience a decent retreat mid-year but the DOW is happy to keep powering up, perhaps with limited upside. This is not surprising as the markets are getting ahead of themselves and ‘real life’ needs to catch up with the optimism. Perception has to find balance with reality.
While this is not a particularly clear picture, we should beware of a retreat in the coming weeks.
Enjoy the ride
Tom Scollon |