1/29/2019 – A mixed day with the Dow Jones up 51 points (+0.21%) and the Nasdaq down 57 points (-0.81%)
As we have been saying, the stock market remains at an incredibly important juncture. Things are about to accelerate in an unexpected way. If you would like to find out what happens next, based on our timing and mathematical work, in both price and time, please Click Here.
While most investors out there remain incredibly bullish, quite a few technicians now expect a re-test of December 2018 lows……
We Now Expect A Full Re-test Of The S&P Low At 2,346
Picking up on a theme that Nomura’s Charlie McElligott has been pounding the table on for the past few weeks, namely that the market is poised for a potential steep drop in the coming days, especially with the $7.5BN MBS rolloff from the Fed’s balance sheet on Jan 31, this morning BMO’s chief technician Russ Visch writes that after highlighting the deterioration underway in his short-term timing model for more than a week, “it appears as if the rubber is finally beginning to hit the road in a real way with respect to the “re-test” phase of this bottoming process.”
Specifically, Visch notes that yesterday the S&P 500 reversed back to the downside after failing at a declining trendline and warns that “given the history of how the bottoming process plays out for declines of this magnitude we expect the index is now likely to retrace most, if not all, of the rally since late December. i.e. – a full re-test of the low at 2346.”
Please note something of significant importance here.
While quite a few market technicians discuss a distinct possibility of the market re-testing its December lows, no one, and I mean no one, is even talking about the possibility of the market slicing through December low and falling much further.
This is consistent with the extreme long-term bullish sentiment we have been discussing here for months.
Luckily, we have a chart in our premium section that shows not only what the stock market should do over the next few weeks, but for the rest of the year. If you would like to find out what the stock market will do next, in both price and time, based on our mathematical and timing work, please Click Here
Please Note: Our latest call was a direct hit. While everyone was panicking our work projected an important bottom on December 27th (+/- 1 trading day) on the Dow at 21,725 (+/- 50 points). An actual bottom was put in place on December 26th at 21,713.
