Maintain continuity. Last Friday OCT 1, in the face of a market sell-off we stay calm. This from MITA 760:
...<NDX holds firm in face of strong eco numbers. This will set the stage for this 2,450 test again early (Mon or Tues)next week and it must take this resistance out on this last assault. Failure to do so will create countertrend that will take us back to take down 2,360. We should rally nicely on Monday pre-Fed....
And MITA 762:
...The bottom line for me is that we are going to get this counter-trend rally that could last as little as one day but hopefully longer. IBM will be the key for me along with my established NDX, BKX and SPX levels et al laid out. These indicators will dictate for me how long I will flap my bullish wings...
Next on Monday OCT 4th MITA 764,
...<We need to take this NDX 2,450 resistance out now in this last 40 minutes and make it stick into the close. This should be confirmed with IBM close above 118 and strong BKX today. Tomorrow will be strong pre-fed announcement. The question is will they hold the gains into the bell after the announcement. Based on Mr. G's past track record. There should be no surprises, there will not be a rate hike, imho. The question for me is one of neutral vs. tightening bias. A shift to tighten will rock the market>...
The confirmation in MITA 766:
...<MITA nailed it on the head as we take out NDX 2,450 wall from Friday wave of selling - no panic- with strong carry over melt-up of BKX crushing 755 BKX resistance to finish at NDX 2,467 (+63.5, + 2.65%) and BKX 771 (+ 25, + 3.4%). IBM finishes at 120 and true to form. Deadly precision like an infra-red heat seeking laser guided missile. TARGET DIRECT HIT ACHIEVED>...
Next in MITA 769 on Tues Oct 5:
...<The market was real strong across the board and only Mr. G moving to tightening bias will stop market dead in its rally track. Otherwise, no news is good news and this rally should continue until Thursday sometime before we get that next big eco # on Friday. LET THE PROFITS RIDE ON "NO ACTION BY FED UNTIL THURS intraday", imho.>...
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What Mr G. did in essence was throw a curve ball. He said the FED is inclined to move to tightening bias and will raise rates if after looking at two months of employment statistics et al (OCT, NOV)he sees no slowdown in the economy. Mr. G. literally did nothing but put out one more wait and see and bought more time.
All indicators NDX, SPX SOX, BKX, RUT clearly established, including IBM got this nice counter-trend bounce. And, one by one, we achieved all of these upside objectives.
And now IBM has the early start back down as we have stated. Again we get this first close below 118 (on this second go-round)at IBM 116 3/8 down 2 13/16. IBM's gravitational magnetic pull leads to reversals in the other key indices. Notice that SOX, BKX, NDX have turned back down and now the worm turns. A second close below 118 will seal the markets fate and take the DOW back below 10,081 and break DOW 10K decisively before we hit an intrady low support of DOW 9,770. On the other hand, it is clearly obvious with a bullish employment number that the second close below IBM 118 will not materialize and the market will continue to rocket northbound with the DOW testing 10,700 intraday.
Best regards, J.T.
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