Monday, June 29, 2009

At the crossroads

Well, our ray of hope did lead to a little sell off this morning, but price quickly reversed and went impulsively higher where it stayed in about a 4 pt range for nearly 5.5 hrs. Every time price hit the 927-928 zone (key areas of resistance as marked on the chart) it sold off until the 924-925 area where it was bought. Volume practically dried up during this time, and if you were sitting around watching the markets you very well may have fallen asleep.

These points of range contraction are indicative of inflexion points. In this specific case, either the market bursts higher or will become ST bearish. Since we are right at the bottom of the trendline channel, this would also fit nicely into that picture. I'm, of course, leaning bearish, but here are the key events I'm watching:

- A burst to 942 that holds for more than one hour. This will be bullish signal that says the highs are not in and we are going to move higher.
- A drop below 917 that holds for more than one hour. This will be a very bearish signal that says we will likely take out all immediate pivots in a significant move lower.
- A short burst above 924 that quickly reverses. This will be a very bearish signal that says we will likely take out all immediate pivots in a significant mvoe lower.

The month/quarter end tomorrow, let the market lead.


  1. We got the move below 917 for the past few hours.

    What do you think about EOM/EOQ tricks?

  2. Marc, they may try and salvage the day by not having a selloff, but I'm counting the top as in and looking at any retracements as opportunities to add to short positions.

  3. Hi Corey, thanks as always for your work, its been a great help to me. I think we are def looking at the start of the minor wave c move down of Major B of primary B/2. The number of divergences support this as well.

    What is your estimate of the bottom of this minor wave c before major C begins?

  4. Sorry Rich...called u Corey by accident...was on the rosenbloom blog earlier :)

  5. Suresh, LOL no problem. My target for intermediate wave B is spx 815 with 850 being the minimum target and the lows being the maximum target.

  6. I may have asked u this before but sometime back you mentioned that u thought that intermediate wave B would go down to mid 700s and fool everyone into thinking we were in primary C/3 and then begin intermediate C all the way up past 1050...changed your mind on this?

  7. Certainly I have that as a possibility, but I will be taking significant profits in 800's and see how it goes from there. After all the beating I've taken on this primary wave B/2, I don't want to get too gready on the way down. The time to make the most money will be in 1000 area, which I still think we will get to unless the market breaks the lows. But I'll be leaving some positions on (house's money at that point) just in case.

  8. Thanks Rich...all the best, speak soon.