We are again faced with the question: Has the market bottomed out or is this just another dead cat bounce?
It's too early to tell.
Right now the major trends continue to be negative for equities, crude oil and some other markets we have identified in our videos.
No market goes straight up or straight down. You will always see counter-trend rallies. If you are familiar with the Elliott wave theory, you know that markets tend to go up in five waves, three with the trend and two against the trend. When a market is pulling back against the major trend, like we are seeing now, it can be an excellent opportunity to either exit a position if you are long or go short the market. It is definitely going to be important to see how we close out the week.
While the current rally looks exciting and may go higher, the bottom line is the trend is still down in the equity markets.
