It's a rumor-driven market.
Early this morning, the Futures were up because, SUPPOSEDLY, another round of "peace talks" have been scheduled and, why not, they've done nothing so far? Meanwhile, in reality, China is back to lockdowns as Covid is once again spreading over there and that, by itself, would be enough to knock down the markets (ding to the global economy, more supply chain issues, etc.) and oil is still around $104, which again, by itself would be enough to take down the market but I guess it's better than $128 last week so YAY! – I guess.
This is why we use our Bounce Charts during a crash – they keep us grounded and remind us that all this short-term movement is meaningless in the big picture and, in the big picture, we're not making any progress. That's why on Thursday I can write a Morning Report titled "/ES 4,320)”>Thursday Failure – Rally Fails at the Strong Bounce Line (/ES 4,320)" and you can see above that we EXACTLY failed on Friday at 4,320. When you see us make predictions over and over again that get hit ON THE BUTTON – you have to think there may be something to our 5% Rule™ – right?
Remember, these are the same levels we've been using since we topped out in December and predicted a 20% correction in the markets and that was before the war:
- Dow 36,000 to 28,800 would be a 7,200-point drop with 1,440 bounces to 30,240 (weak) and 31,680 (strong).
- S&P 4,800 is 20% above 4,000 and that makes it an 800-point drop with 160-point bounces so 4,160 (weak) and 4,320 (strong).
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