Wave 5 counts well as an Ending Diagonal at all the lesser degrees of trend. All three Fibonacci targets were met. The Cycles Model call for a turn over the weekend. What more can we ask for?

To answer that question we need an unequivocal decline. Friday afternoons are not good times to start a bear market, since the status quo is so strong.

Has the NYSE Hi-Lo Index has gone nuts? Possibly not. With the indices making all-time highs, a lot of laggards have to be bought, creating this anomaly. I believe this is an outcome of passive investing…false signals being given by the market right up to and even after the turn.

Remember my comments about Martin Armstrong, who said that the NASDAQ strength continued for a week after it had topped in 2000. That is because the QQQs were the most popular ETF at the time. They were in a parabolic that pulled the entire NASDAQ index along.

We may be seeing the same here, even though FB and AAPL took a hit recently. The laggards must still be bought and that is their Achille’s heel. They will also have to be sold when the market goes down.

The VIX has been prodding at the 50-day moving average earlier today. There is a good chance that it may close above it. We probably won’t know until the final minutes of the day.

The real kicker is the USD which has broken down beneath its September 2017 low at 90.99 with a new low of 90.70. There is a tangible loss of confidence in the USD that has been building for some time and is finally coming out in the open.

ZeroHedge reports, “As the mainstream media once again loses its collective mind over Trump's "shithole" comment, Congress, after expressing optimism just a few days ago, has once again descended into complete chaos with any hopes of a bipartisan immigration deal seemingly being tossed...well, down the "shithole."

This may be the catalyst for a sell-off to begin over the weekend.

I’ll send out more on this after the close.

In the meantime, get ready for the reversal.

Regards,

Tony

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