Markets are bending, will they break?

Stocks made a significant dip last week and important support levels are giving way. The continuation of the rally that started in November is now questionable. Here is the current Nasdaq chart:

Nasdaq is trying to stay above the important 5800 support level. But all my indicators keep pointing down, showing a strong possibility for more downside action to come. Once the Earl (blue line) turns back up we will have a first indication of a tradeable bottom. So, better be patient here. The LT wave has been working like a Swiss clock so far this month. If it continues that way then we are likely to get a low today followed by several days rebound. Let’s see.

My more long term ELC indicator is still negative. I put it out on Twitter from time to time, this is the latest:

ELC keeps going down since this March 3 tweet https://t.co/wZmgEfoykc and Nasdaq has now dropped <5810. Waiting for a bottom. $QQQ pic.twitter.com/TOcXAw65RY

— LunaticTrader (@lunatictrader1) March 22, 2017

Once the ELC turns higher we can become more confident that a next leg higher is starting. Until that happens I wouldn’t be too aggressive and just wait. The vigor of any rebounds after down swings will also give us important clues.