Earlier this week in our “Elliott Wave Monday Webinar”, I talked about how the markets are still in what’s called a “risk-on” mode, meaning investors are feeling pretty confident and are moving towards riskier investments like stocks. This trend could continue, but there’s a big event coming up: Federal Reserve Chairman Jerome Powell’s speech on Friday at the Jackson Hole symposium. What Powell says could really shift things. Will he hint at keeping interest rates lower (which markets love) or will he surprise and maybe wont deliver what markets wants?
One thing I’ve noticed is that U.S. bond yields (which often reflect where interest rates are going) still have room to decline, maybe down to 3.25%. Meanwhile, the U.S. dollar seems to be weakening, and the S&P 500 is hovering near its highest levels. This tells me that investors are still willing to take on more risk for now.
But here’s the kicker: when I look at the charts, particularly the S&P 500 futures, it looks like this upward trend isn’t done yet. I don’t see a full five-wave pattern, which usually signals the end of a bull run So, to me, it seems like the market still has room to grow before any major correction happens.
That’s why I believe this is still a “buy the dip” scenario for the market. There may be pullbacks along the way, but I see those as opportunities to jump in rather than a reason to panic.
I will keep a close eye on upcoming fourth wave. Supports can be at 5540-5600.
Grega
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