With the breakout on the SPX, it looks like we will be moving to new highs. It is important to note that participation in this last rally has been only by a few and not the masses as xlf and xlv are showing considerable relative weakness. This is common in the final move, so be aware of it. Buying should be strong up to a new high anywhere between 1040-1060. Should sellers come in and take this below 1020 before, then we are likely looking at a failed wave C.
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so 970 off the table? Here's what Mchugh said:
ReplyDeleteStocks are up again as of mid-day Wednesday, September 9th. We can count five small waves up as nearly complete for the rally from September 2nd, so some sort of pullback is likely over the next few days. We continue to believe a Rising Bearish Wedge is forming in the S&P 500 and Industrials, which is a five wave pattern consisting of three subwaves each. Because of the overlapping nature of this pattern, we have changed the nomenclature from numbers to letters. The small top that is occurring now is likely wave a-up of the middle wave of this Rising Wedge termination top pattern, which means the correction the next few days should be wave b-down with wave c-up to follow and complete (C ) up of C-up of (B)-up. The Final wave for C-up will be (E) up. If you study the updated charts on page 6 in Wednesday's Australia Daily report at www.technicalindicatorindex.com, this will make more sense, as a picture is worth a thousand words. Neither the S&P 500 or the Industrials have topped their August 27th highs, so we cannot completely rule out that (B) has topped, although that remains a smaller possibility. Once those August 27th highs have been exceeded, we can feel more confident in the Rising Wedge scenario.
Yes, it appears 970 is off the table. My make or break line was broken this morning (unless we have a failed wave C at today's high, which I doubt). See my update today on what I expect for tomorrow.
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