INDEX UPDATE
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The 200+ rebound today was impressive, on a subjective basis, and many may now feel that the market will surge upwards now. However noticed something that may put a negative twist on things.
Notice something very similar with the pattern when the DOW was at the 8600 STAIR-STEP, and the current pattern:
1) The 8600 STAIR-STEP lasted 16 days after the big drop of 8/4. We are now in the 14th day after the big drop of 8/31.
2) During the 7600 STAIR-STEP there were 3 peaks on 8/7, 8/19, 8/25. So far we have had 3 peaks on 9/2, 9/8, 9/16.
3) On 8/21, 2 days before the 8600 STAIR-STEP broke down, the DOW formed a hammer very similar in size to the one that was produced today. Today was a white hammer but on 8/21 it was a black hammer.
4) Most importantly, my short term technicals are showing almost the same pattern.
Please understand that my short-term technicals are not based on price but on time; therefore I am not suggesting that a big dump will come in a few days but that we may have some sort of negativity soon, contrary to what many may feel in light of todays huge rebound. The pattern suggest that the DOW could move up 100-150 points on TUE/WED but close off the highs forming a SPINNING TOP, and that the negativity could arrive on WED/THUR.
I normally do not pay too alot of attention to similar price patterns, but since such pattern is also strongly confirmed by my technicals, I will not discount it totally.
My SHORT-TERM TECHNICALS on the DOW are at 54, so its smack in the middle, with a bias to the upside. From 54, the upside potential is 2-3 days/200-400 points before the DOW would get to CLASS SELL status. If we were to reverse tomorrow, the downside potential is 3-4 days/300-500 points before becoming a CLASS BUY.
Seeya |
