INDEX UPDATE
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As for time frame for market direction:
1) Small pullback, of possibly 150-250 points off today's highs, to start today with the intraday high near 8750(maximum 8850, although unlikely). This period of weakness may have an UP/DOWN/UP/DOWN pattern so it may be very hard to play, with tomorrow having the strongest probability of a decline. This pullback/weakness should last 4-6 days, so the bottom should arrive by the middle of next week.
2) UPSWING to begin around WED/THUR next week, and should top off around SEPT 2/3/4. Target of this upswing will depend on how low this forthcoming weakness gets, but for now feel the 8850-9041 should be the limit. If this short-term pullback is much worse than anticipated and sets LOWER LOWs, which is unlikely, then it will change the timeframe.
3) SEPT 2/3/4 for the next decline to start. This is the decline that could turn out to be the big one, unless we break the major resistance at the 9041-9100 range. The probability of the big decline over a period of a few days has the highest probability of occuring near the middle of SEPT, but the weakness will start during the first week of SEPT.
Currently I hear from the media how positive the market was yesterday.
Actually the market internals have improved but has not improved enough to even hint that this downtrend is over. For a comparison, within 6 days after the the OCT dump the NEW HIGHs were able to get back close to 150. So far the highest the NEW HIGHs have gotten is only 56, which occured yesterday, and it is already 10 days after the 300 point decline of AUG 4. Also we have already retraced 36% of the 1100 point pullback for the second time(8/7 intraday high of 8710) and the best the NEW HIGH can get so far is 56. I actually interpret that as a negative for the market.
Please keep in mind, that unless we start setting HIGHER HIGHS AND HIGHER LOWS, we are TECHNICALLY still in a DOWNTREND or RANGETRADING.
SEEYA |
