Sunday, October 3, 2010

Update

Click on Chart to Enlarge

If the market is topping it here, it would be a nice harmonic pattern. The size and time consumption of what I have noted as wave "c" above is almost the exact same as wave "a". There are several fibonacci time relations pointing to late Sept/early Oct for a turn present on the chart above as well if you look at in depth.

Assuming the market does reverse down from here, one key will be to see if the market retraces more than 61.8% of the Sept rally. I have the retracements drawn on the chart. 61.8% would be a little below 1090 as of now.

Click on Chart to Enlarge

One thing I often look at is what sectors are not confirming new rally highs, and in particular I look at the financial sector in the current market environment. You can see it is not confirming new highs on this rally the last week or so. When that has happened in the past, the market has usually been near a new correction.

If these charts mean anything, I would expect the market to fall this week.

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