Sunday, January 10, 2010

Tomorrow must close down or else...

My whole count of an ED is either confirmed or invalidated tomorrow at the close. An up close invalidates it and a down close confirms it. I didn't have as much time this weekend as I wanted to touch on some key turning dates that we are on, but here is what I have. There are two timing cycles that the market has pretty much stayed true to over the last several years. One is the 15 week cycle and the other is the 32 week cycle. Now we haven't had many pivots to even consider since the March bottom as the market has pretty much gone straight up. But the top two charts show the potential turning dates starting with last week and go through the first week of February.

The other interesting turn date is a time relationship with the A wave. This also fits nicely with a 3rd wave tomorrow instead of an ED with the turn date coming the last week of January with a price target in the 1160 range.

As for counts, there are two scenarios. Either we finish the ED and primary wave 2 tomorrow or we are in a wave 3 that has much more room to go. In the latter scenario, we are likely looking for a turn date in late January or early February. And even at that, we will need to watch closely how the market reacts to the next downturn. This market has gone nearly straight up further or more relentlessly than I ever imagined. But one thing I do know, the ups and downs of a market (or waves) are healthy and sharp action (or spike action) tends to go both ways. When the next move down comes it will be very sharp and dramatic because there are so many sell stops beneath the market they create an air pocket where the market will go into a freefall before stabilizing. It should get interesting.

Key resistance level is 1150. If we get close above that than the ED is off. Key support level is 1138. We close below that and the ED scenario should be confirmed along with the end of P2.
blog comments powered by Disqus