2018/05/10 Commentary: Consternation Dissipation
© 2018 ROHR International, Inc. All International Rights Reserved.
Extended Trend Assessments reserved for Gold and Platinum Subscribers
Commentary: Thursday, May 10, 2018
Consternation Dissipation
Some might characterize the recent US equities rally (and other equities as well) as ‘surprising’. And in the context of the nervous global politico-economic environment, that could be a reasonable view. Yet once the market activity is considered in a full intermediate-term ‘macro-technical’ context, the recent return to a more aggressive near-term up trend is anything but surprising… it is in fact the only logical extension of a consolidation psychology that began with such a shocking near-term equities implosion in early February. It was necessary to consider that initial return of volatility (based in part on technical factors) from its long slumber in light of the previous, very extended overall bull trend. In that context it was quickly clear it was far more likely to be a correction than a full-blown trend reversal.
The initial early February threat to the trend was indeed scary. Yet it was also obvious by later in the second week of the month this was a very compressed and violent reaction that had held broad intermediate-term trend support (much more below along with annotated graphs.) This is as reviewed on our Evolutionary Trend View (ETV) update in the Friday February 16th Commentary: Clearly More So 1998 Than 1987 post. The chart and major moving average projections there fully anticipated what was to come.
Yet it also had to be allowed the early February selloff had been violent enough to warrant consideration the bull trend-leading US equities were also more likely to be entering an extended consolidation. And much as the overall enthusiasm that fueled a two-year uninterrupted rise from the early 2016 last sharp correction, the recent correction was going to include worries surfacing that had not been evident during the rally.
That was also anticipated in our February 24th Weekend: Consolidation Consternation post, including the key observation (repeated from the February 16th ‘Clearly More So 1998 Than 1987’ post) “…especially after a particularly significant accelerated trend, markets are more likely to go into a consolidation phase across ‘time’.” And in that way the ‘consternation’ (i.e. fresh angst) was going to ensure that the US equities spent some goodly amount of time in a consolidation, with many parties expressing concern the market could go from bad to worse (than seen in early February.) Yet for all the thrills and spills, US equities never did anything more than hold lower support.
Authorized Silver and Sterling Subscribers click ‘Read more…’ (below) to access the balance of the opening discussion. Non-subscribers click the top menu Subscription Echelons & Fees tab to review your options. Authorized Gold and Platinum Subscribers click ‘Read more…’ (below) to also access the Extended Trend Assessment as well.
