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Yesterday Tuesday we wrote: “Dip6 has been overdue for over a week now. And under the hood, market internals are saying that stocks are more primed for selling than buying. All that’s needed it a negative catalyst. This catalyst is likely to be FOMC announcement tomorrow. .... So the probability of Dip6 arriving after FOMC is higher now.”
Dip6 indeed arrived, immediately after FOMC announcement. We must confess that the selling was hard and fast. That took us by surprise.
So now the questions are: Is Dip6 done? How much lower can it go?
Here’s the thing that’s worrying us. Market internals and price actions are sending out messages similar to the start of May. This means Dip6 can morph into Major Pullback2.
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