Wave 2 rebound well on the way
The market seem to be charting a wave 2 rebound at the moment. The index I use to gauge overall market sentiment and psychology is the broad market index which I prefer so that will be the one I focus on to make things simpler. As mentioned before, that has to be weighed against other sectors and markets to give an overall picture.
So back to the broad market index which seems to be charting a wave 2 rebound (an alternative count sees this as a wave 4 extended rebound). This rebound tagged the 38.2% Fib retracement level on Friday and promptly retreated. At the moment, premarket seems to indicate a higher opening. So either the market continues its rebound towards the 50% level or if the rally gets going towards the 61.8% level. As a reminder, the CPI data is out this week so that may be an event to watch out for. A gap and go on worrying inflation numbers will probably trigger that third wave down.
Considering the uncertainty, this is not the time to go Fomo in my opinion. Neither is it time to go all cash or fully defensive. The sentiments have turned bullish in last week's AAII's survey so that is also worth noting. I am personally overweight on cash as well as hedged around 50% on my portfolio as a safeguard. As mentioned previously, I am more towards safety and I believe there will be better risk reward opportunities going ahead.
Disclaimer: Please kindly do your own due diligence as this is a sharing article and in no means financial advise. I am just sharing my opinions and thoughts.
Thanks for reading my commentary. Hope it helps!
Stay safe! 😊
$Semiconductor Bull 3X Shares(SOXL)$
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Do you think now it the second rebound? I think we may still need to wait.
Do you think now it the second rebound? I think we may still need to wait.
Love to see more rebounds here in the market.
Do you think it will be a good time to buy in the dip?
We need to wait for more time before everything confirm.