After breaking the weekly trend line support that goes back to the lows in 2009, stocks rallied hard by weeks end. The daily chart shows the rally in the MTPredictor wave 4 area. The STF shows there may be more downside ahead.
The last time we corrected, we ended up with a V-shaped bottom which is not common. Usually, the market will roll over to re-test the lows. This looks like what may be setting up. A retest of the trend line is also a possibility which means we may still have some upside to go. So far, we don’t have any indication that sellers are overcoming buyers. We will see if we get any additional follow through this week.
Oil rallied hard off of the weekly MTPredictor DP support. August-September tends to be a strong period for oil historically. It has run into some DP resistance on the hourly chart. We’ll see if that will slow it down some early in the week.
Check out the rest of the analysis in tonight’s MTPredictor Weekly Market Update
