US stocks fell to their lowest levels since early July after touching new highs earlier in the week. This is nicely in line with our LT wave chart for August. If the expected pattern pans out then more weakness can be expected after a rally attempt in the next few days.
Let’s have a look at the Nasdaq chart:
The Earl2 (orange line) keeps going down without any signs of a bottom in place. The faster Earl (blue line) and MoM have fallen back in line with it, and now also point down. This means we are in a downturn and better wait for a bottom in Earl2.
We remain in a lunar red period this week, so there is no good reason to rush back in at this point.
Major support for Nasdaq is around the 5000 level. As long as we stay above that level there is not much going on. If there is a convincing close below 5000 then the odds of a more serious correction would go up considerably.