Stock market remains mired in abc on the assumption that an ending diagonal is in progress. Our line is drawn in the sand as far as critical support. 10,119 - 1.35% is 9,980, but this is just the other side of 11,000 round-number support so let's say 9,975. What bothers me is that everybody expects a new high here, even the bears (namely me). AAII just came out with the latest sentiment and bullish % is 51.23, which is the highest since May, 2008.
I have an alternate count that is bearish for the stock market.
If this count holds true and an unexpected decline occurs it will need to go below SP futures 1163.50 to trigger a critical support break. Early warning would occur at 1168.25.
99er posted a potential diamond top in the SPX in the comments to the 3:00 post.
Dollar index futures closed at 77.35. I sold DX futures and UUP, so I am flat all markets except for a small ZSL. I look for a spike low for the dollar which I will buy.
This goes along with a spike high for gold breaking out of a wave 4 rectangle. Gold is forming a wave 4 rectangle, so I want to stand aside of gold and the dollar until the gold top is in. This top should occur Sunday night.
The guy at gi61et's blog posted the same bearish count for the s&p earlier but with a bit more detail. So you're not alone in thinking this might be a possible outcome: http://gi61et.blogspot.com/2010/10/2110-bst-spx-end-of-day-update.html
ReplyDeleteSPX
ReplyDeleteDiamond Top.
http://99ercharts.blogspot.com/2010/10/spx_30.html
Enjoy the weekend!
So per the diamond I should expect support Sunday night around 1176.
ReplyDelete99er
ReplyDeleteThanks for sharing the charts, next week should be the start of a large bear move. Take a look at the MACD (12-26) MACD EMA (9) on 6 month of the DJIA this is a pretty good indicator I use.
Jack C
If not, then that's a signal.
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