Stock Market Analysis

Tuesday, February 20, 2018

Volatility Ahead!

Welcome back from the CNY holidays and coincidentaly, its was also President's Day long weekend in the US Market! Hope everyone had a lot of fun and is ready for action again!

AND Welcome to the Week 4 of February 2018!

How time flies! Before we knew it, even February is coming to an end soon! So far, February worked out EXACTLY how I predicted it to in my 2018 prediction report at the start of the year!

It has been an extremely volatile February so far, starting from the intermediate correction I predicted at the end of January and then I correctly predicted once again, the bottom of this intermediate correction 2 weeks ago. However, as I said before, I don't expect this intermediate correction to give up so suddenly, leading to a sharp V shape reversal. With how steeply the market has climbed since that bottom, making 6 straight positive days, I would expect this week to be very volatile as the market take back those gains and then reach a point where it finds real strength to bring this intermediate correction to a close.

Supporting this outlook is also how the S&P500 retreated back down after touching its 30MA intraday last Friday. The 30MA is a critical resistance level in every intermediate correction and this one looks like it is going to hold.

In fact, investors also secretly returned to the safety of bonds last Friday, depressing bond yields, even though the market closed a positive day.

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


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