I commence with my gratitude to The All-Knower
Stock Market have rallied strong on Monday and continue the rally till Tuesday early afternoon. Only to given up all the gains of the Tuesday later by the day and then-some! Was that the sign of the break-down of the underlying strength of the rally? It is quite possible.
Markets have rallied strong both Monday and Tuesday 05/21 all day and 05/22 before noon. Then markets fell sharply to give up all of the up-move of the day on 05/22. The sell-off of the later afternoon was caused by resurfacing of concerns for EURO, whether EURO is going to be shrunk to s smaller in size!
The sell-off of the 05/22 stopped at about 50% retracement of the one and one half day (1 1/2) rally. Usually that is a healthy pull-back to gain/gather the enough strength and thus continue the new bull-trend higher. However, failure to contain the pull-back, shall mean that we just had an UP blip, caused by the time cycle of 05/17-05/18 and stronger and longer term time cycle is pulling the markets down. Failure to maintain the lows of 05/18 or 05/21 (see attached chart), shall mean that we another leg down, which shall be 3rd leg (and final thrust to the downside). This could last until 05/25 or it may even continue till 06/01-06/04, the next time cycles posted in my earlier posts.
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