Friday, October 2, 2009

Has the tide changed?

Yesterday's breakdown saw the indices sell off more than they other correction since the first W wave was put in at the 6/11 high. In fact at the close last night, the corrections were of equal size, but when you add in this morning's weakness, it will top it.

So we are sitting on move down that is acting more impulsive than our intermediate X wave that lasted from 6/11 to 7/8. Are we putting in another X wave or has the top been put in? Certainly time will tell as the puzzle will get clearer with each passing day. The move off of the top is not a clear cut impulsive move (so far), but could be rectified with some zigzag at the bottom. I expect the market to be testing 1000 very soon.

What I'm watching? Well, first the 15 min 34 SMA for signs that the current wave (my green labeled 3) in progress is over. Certainly any move above 1070 will make the current wave another X wave and we'll be moving to much higher prices.


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