Don,
I agree with your assessment that the turn back down should begin soon, and most likely tomorrow. I also agree that the next turn down will demolish the trading range we've been in, with at least a day or two setting new records in decline for a day and volume. We're getting ready for a bloodbath. As long as we hold below 1020 Dec. S&P futures, and 1015 SPX, this scenario is in no danger.
The dramatic declines should begin by Wednesday, and should continue into 10/21 + or - 1 day, based on 16,22,26 & 36 day cycles that call for a s-t change of direction in that time frame. Last Thursday's change in direction was initiated by the 16 and 22 day cycle lining up there, which in the recent past has only resulted in a 1 to 3 day turn, then the trend resumes.
This scenario will be confirmed by a lower close beginning no later than Wednesday, followed by continued lower closes into the middle of the week after expiration.
In elliott terms, I believe we are finishing up a 1-2, 1-2. Those familiar with elliott wave theory know this is the initial development in a five wave pattern, just prior to acceleration at the center of the powerful wave three. The first wave 1 began from the post rate reduction spike high (9/29), and ended on 10/2 @ 5:50am (globex). The first wave 2 completed 10/6 @ 9:40am. The second wave 1 began there, and completed on 10/9 @ 11:20am. The second wave 2 started there, and we completed wave a of 2 at today's highs, are working on wave b of 2 currently and will move higher from tonight's globex low/tomorrow's early morning low in a wave c of 2 rally, that I expect will be choppy with lots of spikes, but that won't significantly clear the 1020 area.
After this c of 2 rally terminates, which will be no later than Wednesday by noon, and could be as soon as the late Tuesday, we will be greeted by a wave 3 of 3 of 3 selloff that will carry into next week. This is the portion of the '29 selloff that was called the "crash." My minimum target is 880SPX/6800DOW, but 730/5600 is a possiblility.
Once again, you and I are in exact alignment on a serious market move. Do you recall what happened the last few times this occurred? I sure do!! $$$$ !!!! Heck, we've even got Mr. Hueb in on this one with us...fancy that!!
Regards,
David |
