Stock Market Analysis

Monday, February 26, 2018

End of Intermediate Correction

Welcome to the final week of Feb and the first week of March 2018!

How time flies!

2 months of 2018 has gone by and so so much have happened in the US market and economy that seemed to draw a very clear line between 2017 and 2018; The biggest intermediate correction in 2 years with the biggest 2 days drop in 8 years along with yet another US government shutdown.

Even though the US government is still in shutdown, the US market has actually continued its recovery off the bottom of this intermediate correction exactly as I have predicted it. Indeed, when it comes to the market, sentiments, which is how things "feels" matter much more than what exactly happened. Even though a US government shutdown sounds really serious, investors just don't think its that big a deal and investors continue to be more technical oriented, which makes the recent market behavior so predictable.

On the technical front, I really like how the S&P500 rebounded right off its 30MA on the weekly chart. This strongly supports my outlook that we have seen the bottom of this intermediate correction and that things are ready to get better. Why can't the market just turn around and crash? Well, because market don't just crash without reason and there are pieces that needs to be in place to generate a market crash, something which so far has been developing but just not quite in place yet. This is why I suspected that this is going to be a 2007 style kind of year, building up to the market crash in 2018 as the pieces fall into place through the course of the year. 



However, even though I expected this intermediate correction to put up some kind of fight on the S&P500 front while the Nasdaq lead the way for now, it seems like the S&P500, consequently the US market in general, is ready for the kind of V shaped reversal that I never expected. It is now up against its daily 30MA once again and if it breaks this level today and follow up on it tomorrow, it would almost confirm the end of this intermediate and that the market isn't going to make a double dip. Why did I say "almost confirm"? That's because it still needs to test the 30MA for SUPPORT after breaking it in order to confirm the reversal.

Like all first weeks of each month, the ISM index gets released. This is one of the most important economic indicators and how it does usually sets the pace and mood for the month. Consensus is expecting a lower showing and if it beats, it could truly provide the reason behind this recovery and therefore the engine for new highs.

So far, me and my Master's Stock Options Picks Subscribers as well as my Star Trading System students have taken advantage of this reversal with strategically placed call options early last week and we are sitting already sitting on profits. If you missed making a profit this time round, please don't miss the next opportunity to profit with me... sign up now for just $1 at http://mastersoequity.com/

For now, the market remains in short term bull trend within an intermediate neutral trend and primary bull trend.

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