Elliott Wave: Week of 1//7/19 - The Powell "Put" You Buying it?
Fed Chairman Powell took the reins from Ms Yellen with promise of increased transparency and a less dovish persona. He stayed true to his purpose, until 1/4/19. His fold on Friday introduces a new narrative with an old ring - I call it "The Powell Put." Like many before him a supportive narrative for markets becomes prominent. So what does it mean?
We're all familiar with the mantra "Don't fight the Fed" with plenty of wisdom in a simple phrase. So it is again. A tightening of expectations is called for where the "B" wave target is raised, but still faces significant challenge. An appropriate level is the .618 retrace from decline of 2800-2346 to the area of 2627. Before then is the 2603 resistance from an earlier decline, and then the drooping 50d sma as it approaches the same area. Beyond that is the 200d sma. Anything beyond that calls for more serious consideration of the alternative shown by the yellow line above 2627.
The primary read is still a B wave followed by retest of the 12/24 low area. The "Powell Put" suggests further decline to be modest. The lower level of wave C has been raised to 2242 Fibonacci level for a target of 2242-2350 for any retest.
Another perspective on the Powell Put is how the narrative changed from the 12/19/18 rate hike meeting to Friday's dovish language. I find Powell's lack of insight and conviction more troubling than the market's reaction. Figuring out the latter is where I prefer to expend energy - gladly.
We're all familiar with the mantra "Don't fight the Fed" with plenty of wisdom in a simple phrase. So it is again. A tightening of expectations is called for where the "B" wave target is raised, but still faces significant challenge. An appropriate level is the .618 retrace from decline of 2800-2346 to the area of 2627. Before then is the 2603 resistance from an earlier decline, and then the drooping 50d sma as it approaches the same area. Beyond that is the 200d sma. Anything beyond that calls for more serious consideration of the alternative shown by the yellow line above 2627.
The primary read is still a B wave followed by retest of the 12/24 low area. The "Powell Put" suggests further decline to be modest. The lower level of wave C has been raised to 2242 Fibonacci level for a target of 2242-2350 for any retest.
Another perspective on the Powell Put is how the narrative changed from the 12/19/18 rate hike meeting to Friday's dovish language. I find Powell's lack of insight and conviction more troubling than the market's reaction. Figuring out the latter is where I prefer to expend energy - gladly.