I analyze macroeconomic issues from a fundamental perspective, and I analyze market behavior from a technical perspective. Original macroeconomic analysis can be found here and both macro analysis and commentary can be found on my Caps blog. If you like or appreciate my analysis, please add yourself to my Following List

Tuesday, October 27, 2009

Need to Break on Through to the Other Side .... of the Gap

Right now we are in limbo (would Mr. Market have it any other way?). We need to break the gap at 1057-1060 to confirm the bearish move. And it needs to happen soon. Otherwise we are consolidating at the 50% retrace line, and it becomes more likely that the bulls are going to start another rally wave.

Pattern chart is very bearish, but we need to break the gap.

The bearish count (if this is indeed an impulse down) needs to break down. Soon. Like tomorrow morning soon.

Also notice my notes regrading the count. The NDX made a higher high than Friday's high. So the 1-2, 1-2 count is WRONG on the NDX. Maybe you care, maybe you don't. But I subscribe to the theory the the best count is the one that works on all 5 major indices (SPX, INDU, RUT, NDX and COMPQ).

Recall this chart from 3 previous posts: Another Look at the Correction, What's All This? and That's Good Soup. My prediction from yesterday (Green Notes on the chart) panned out quite nicely.

Here is my VIX chart. The orange dotted line is my prediction, what we needed to see, from a few days ago (The Market Moves Vixenishly)

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