SPX about flat now while RUT is down 1% for the day. This continuing divergence makes it appear like the market is doing OK, but actually most stocks have been going down the last couple weeks. The flight to large caps is a warning. Watching the index is different from watching the market.
As much as I want to be bearish, I think we are in the final 'E' wave down of a larger 4th wave retracement. By my calculations, we should first go down to around the 1100 level to finish this subwave E before a final subwave V gets up to the 1115-1125 level. I expect it to occur by Friday.
Any trade below today's intraday low will wreck this count and will start a downturn to 1070 or so.
Though the big cap indexes make it appear that the market is doing OK, IWM is showing that the top is already in. The big cap indexes should soon follow IWM.
Also, the triple top on Dow Jones Transport is not a good sign for the market to continue higher.
Nevertheless, we still have no confirmation of a trend change from up to down.
Let us not forget the up trend has already blown the accounts of many bears. Therefore, I am waiting.
The wait will be worth it because once the trend on daily charts changes from up to down, the drop is not going to easily stop.
In general, rounded tops are a waste of time. An exhilirating joyride is down the slope of a down trend.
But then, will many bulls switch their caps to those of bears? Right now I have no cap as I put away my bear cap sometime back. Thanks to Carl!
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SPX about flat now while RUT is down 1% for the day. This continuing divergence makes it appear like the market is doing OK, but actually most stocks have been going down the last couple weeks. The flight to large caps is a warning. Watching the index is different from watching the market.
Carl and others,
As much as I want to be bearish, I think we are in the final 'E' wave down of a larger 4th wave retracement. By my calculations, we should first go down to around the 1100 level to finish this subwave E before a final subwave V gets up to the 1115-1125 level. I expect it to occur by Friday.
Any trade below today's intraday low will wreck this count and will start a downturn to 1070 or so.
Should be fun to watch.
F@amp, you are absolutely right.
Though the big cap indexes make it appear that the market is doing OK, IWM is showing that the top is already in. The big cap indexes should soon follow IWM.
Also, the triple top on Dow Jones Transport is not a good sign for the market to continue higher.
Nevertheless, we still have no confirmation of a trend change from up to down.
Let us not forget the up trend has already blown the accounts of many bears. Therefore, I am waiting.
The wait will be worth it because once the trend on daily charts changes from up to down, the drop is not going to easily stop.
In general, rounded tops are a waste of time. An exhilirating joyride is down the slope of a down trend.
But then, will many bulls switch their caps to those of bears? Right now I have no cap as I put away my bear cap sometime back. Thanks to Carl!
Is it a bull trap or a bear trap this time? We'll find out this week.
It has to make its decision.
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