Thursday, October 1, 2009


So far, October was really nice for the bears. The SPX dropped below the important support at 1040 and closed at the low of the day around 1030. With the drop below 1039 (the high of wave [i]) we've got a waev [i]/[iv] overlap. This fact invalidates nearly every bullish count!

An ending diagonal (p. 38 in our bible) however is still possible. The fact that the boundary lines are diverging and not converging, making it a very rare expanding ending diagonal, does not argue for this possibility.

So, let's K.I.S.S. : ) I 've marked 1080 as the top of Primary B or 2 until proven wrong. The move from 1080 down to 1040 as a first wave and the run up to 1070 as a wave 2. Hence we are somewhere in the third wave which should end at 1000ish tomorrow/Monday.

Tomorrow before the open we'll get the Non-Farm Employment Change numbers. You might have heard that GS raised its expection from -200k to -250k (average forecast -180k). For known reasons GS is normally right ; ) so a much worse than expected number should drive the market lower.

Lastly, I just wanted to praise my cycles... lol... It had a cycle top at 9/25, two days after the top in the SPX. So far, it's spot on and I hope it will be it at least till the end of November when there is a cycle low. ; )

I'mma post some charts tomorrow, don't have time now ; )