Nasdaq Nears the Golden Spiral
The NASDAQ high on Tuesday (May 16) was 6170. Fibonacci aficionados will realize that is 10 points shy of a perfect 6180 golden spiral Jeff Greenblatt. He’s the director of Lucas Wave International and editor of The Fibonacci Forecaster.
The most important market theme of the year is the promises the crowd perceived it would receive from the Trump victory. Trump intends to get the economy going again. That’s why the market has been in major rally mode since the election. The growth agenda is now baked in the cake.
You know what that means if issues like tax reform never come to fruition. I’ve been harping on it all year. The market can and will get very nasty if it perceives these victory “bonuses” are taken away. But that’s not all that is going on. Taking it one step further, I remember Starbucks (SBUX) reported sales were down across the country after the Ferguson riots which shows the public does not like social unrest, even if that unrest materialized in a faraway city one can only see on television.
The public doesn’t like the constant drip, drip, drip of bad news every single day. The 24-hour news drip cycle accelerated last week after the president fired FBI Director James Comey. By Thursday morning (May 11) the market dropped big but it recovered prompting Fox Business host Stuart Varney to note the negativity may finally be interfering with Trump’s growth agenda. The stakes were raised even more Tuesday afternoon (May 16) and the market had its biggest selling day since March 21.
When this sort of thing happens, my job is to look at the cycles and the numbers.