Look at the Forest, not the tree

Bulls take the steps, Bears jump from the window. August has seen a very aggressive correction in the market. The question now is where are we now at. To know it, look at the forest, and don't get lost looking at a tree.

The market has been in a series of Higher Highs / Higher Lows, the book definition of an Uptrend. The year 2022 witnessed a bear correction, it was closely equivalent to the one we saw at the start of the pandemic, the difference was that the Pandemic shutdown the economy and the correction was sharp and very aggressive, so the "V Shaped" recovery, after the humongous injection of capital it had (root of the inflation we witnessed afterwards). The one in 2022 was a slow motion bearish correction that touched the support trend and rebounded to keep on making All Time Highs #ATH.

After the 2023 and half 2024 rally we're still on an uptrend, the main trend line is still intact, which is good news, as long as it holds a relief rally is expected. We have a weakening momentum, which means the direction of the trend is still up, but slower.

Since we're at the "Higher for Longer" interest rate policy, the market will create liquidity to keep pushing higher and see if it can make another ATH, or if this will consolidate trading in the range.

The markets move in tandem, and they follow the fractal principle of "the weakest moves first". Let's see which small markets move first and on which direction, this will give us a lead on where this market will be moving. I'm inclined to think about a range bound trading, until the support around 4700 is broken and it fails to go back to its previous highs. A bearish momentum and the break of the support will signal a Bearish market, until then the old saying #BTFD "Buy the Freaking Dip" applies.

"The Trend is your Friend, until that nasty bend at the End."