We’ve known exactly what this type of price action would mean to the charts. In all recent
publications, we indicated that if the pullback off November’s highs proved corrective, it would have
to be seen as a bullish event. Not only would it create a bullish pattern off the late August lows, but
it’d also strongly suggest that no big mid-term down leg is coming. So after a week of strong upside
pressure, there’s no doubt that an important statement has been made. It’s possible that a larger nearterm
pullback will occur, but whether it does or not, price has to be expected to head higher on all
time frames of significance. Of course, the indices passing on short-side setups to instead continue
higher is nothing new. We’ve seen a ton of solid short-side setups get negated over the past two years.
To be sure, market action over the past 91 weeks, which is the time that has passed since the 2009
lows were recorded, has been extremely bullish. During that time, we’ve seen only 18 weeks where the
indices managed to record a weekly loss of more than 1%. So for the course of almost two years, price
has either moved sideways or higher 80% of the time. That’s an impressive number. For the majority
of this period, we’ve been lucky enough to ride the long side, since the indices have rarely even
threatened to go down for longer than a handful of sessions. When the indices do try to pull back, the
move constantly ends up being small for that time frame. Point in case, the largest decline that has
occurred since the 2009 lows were established is the decline that played out off April’s highs. But it
was still small compared to what it could have been. It didn’t even manage to retrace a minimal 38.2%
of the 2009 advance. The opportunity for that pullback to at least take up some time is now also
apparently being passed on. Again and again, the indices are finding the shortest route to higher prices.
We don’t want to fight it in any way. We can spend a ton of time looking at why the indices should
finally relieve the perpetually overbought nature of previously potent indicators, and why a larger
market pullback would make a lot of sense. But if the indices want to continue pushing directly higher
regardless of the technical landscape or reality, we’ll go along for the ride.
In tonight’s publication, we’ll take a detailed look at why this week’s action has to be seen as bullish,
and what it means heading forward. As far as trading it is concerned, we have been short over the
past two weeks. Price action has quickly indicated that we don’t want to hold onto this position for
much longer, but we’ll see what early-week action brings before closing the trade. We’ll discuss this
below as well. After the indices are attacked from every angle, we’ll move on to this week’s Wavespeak
Picks. We managed to close three gains this week, countered by one loss. Not too shabby, and more
winners are lining up to follow.....Wavespeak.com
publications, we indicated that if the pullback off November’s highs proved corrective, it would have
to be seen as a bullish event. Not only would it create a bullish pattern off the late August lows, but
it’d also strongly suggest that no big mid-term down leg is coming. So after a week of strong upside
pressure, there’s no doubt that an important statement has been made. It’s possible that a larger nearterm
pullback will occur, but whether it does or not, price has to be expected to head higher on all
time frames of significance. Of course, the indices passing on short-side setups to instead continue
higher is nothing new. We’ve seen a ton of solid short-side setups get negated over the past two years.
To be sure, market action over the past 91 weeks, which is the time that has passed since the 2009
lows were recorded, has been extremely bullish. During that time, we’ve seen only 18 weeks where the
indices managed to record a weekly loss of more than 1%. So for the course of almost two years, price
has either moved sideways or higher 80% of the time. That’s an impressive number. For the majority
of this period, we’ve been lucky enough to ride the long side, since the indices have rarely even
threatened to go down for longer than a handful of sessions. When the indices do try to pull back, the
move constantly ends up being small for that time frame. Point in case, the largest decline that has
occurred since the 2009 lows were established is the decline that played out off April’s highs. But it
was still small compared to what it could have been. It didn’t even manage to retrace a minimal 38.2%
of the 2009 advance. The opportunity for that pullback to at least take up some time is now also
apparently being passed on. Again and again, the indices are finding the shortest route to higher prices.
We don’t want to fight it in any way. We can spend a ton of time looking at why the indices should
finally relieve the perpetually overbought nature of previously potent indicators, and why a larger
market pullback would make a lot of sense. But if the indices want to continue pushing directly higher
regardless of the technical landscape or reality, we’ll go along for the ride.
In tonight’s publication, we’ll take a detailed look at why this week’s action has to be seen as bullish,
and what it means heading forward. As far as trading it is concerned, we have been short over the
past two weeks. Price action has quickly indicated that we don’t want to hold onto this position for
much longer, but we’ll see what early-week action brings before closing the trade. We’ll discuss this
below as well. After the indices are attacked from every angle, we’ll move on to this week’s Wavespeak
Picks. We managed to close three gains this week, countered by one loss. Not too shabby, and more
winners are lining up to follow.....Wavespeak.com