The headline of this weeks post deserves an explanation: Although I am still awaiting a pullback in February, the longer the markets can cling on to these levels, the less severe the pullback will be. Markets managed to regain some energy in a slow melt-up similar to early 2012.
Despite the formation of the bearish rising wedge and countless EW counts floating around that have us completing a 5th wave of various corrective counts, the massive liquidity injection from all central banks should curtail the downside severely. The chart looks eerily similar to 1980, but we are still missing a washout and we will eventually get it. In the larger context, a correction or even a recession are not that unlikely, but until then the markets seem to have little intention to follow my call for lower prices.
Unfortunately the prevailing bullishness will result in a steeper correction, as the markets…
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