The markets continued to move higher out of our MTPredictor wave 4 supports and in the direction of their wave 5 targets. The ES target sits at 1,700. The rally was in part fueled by the Fed minutes which clarified that the QE will not be going anywhere anytime soon unless jobs and inflation targets can be met which the market didn’t see happening in the near future.
If these MTPredictor wave 5 targets are achieved, it will set up an interesting situation with the 25 year broadening formation in the stock market that has formed. This megaphone looking pattern is a topping pattern that would suggest the downside from new all-time highs in stocks will be the beginning of a major long-term trend change in stocks. The wild card will be the impact and potential continuation of QE.
Check out these patterns and the analysis for the USD, Euro, silver and more in this weeks MTPredictor Weekly Market Update