The Dow as we Approach 2015.75

ECM-Wave-2011-2020

QUESTION: Hi Marty,

Thanks for all the insights as always. Just one thing confusing me – as of October 2015, when the ECM turns down, what happens to the markets? On one blog you wrote a temporary setback in US markets, in another “It is about CONFIDENCE. As the ECM turns down, then you will see the US economy go with it and CONFIDENCE will crash and burn.”

While I know things will change as we get closer to that date – which is it – go to cash in September (or March of this year) and buy again end  2015 or ride the vol of the US equity markets, the Swiss and FTSE (and China and Nikkei)?

Thanks
see you in oct/nov

DJIND-W 2-23-2015

ANSWER: Everything depends upon what we get going into the end of September. We could see important highs in some markets outside the USA. However, if we achieve a high at that time, then there should be a fake-out decline BEFORE we turn back up. If we peak early in the June/July period and bottom at that time. then we should see a rally thereafter. This will all become clear as we approach the summer. Currently the Dow is pushing a bit higher so we could create the early version high with the low going into the ECM. Longer-term, that would tend to be better. The resistance is still in the 18500-18600 area for now. Exceeding that level on a weekly closing basis at this time will be of some concern. We are not at the highs in Energy currently.