Monday, September 27, 2010

Market Timing Update (9/27/10 Close)

[520PM] Futures (ES)
The two recent pullbacks sport a similar structure (see arrows). There have been seven waves down with comparable size.

[4PM] Stocks
Odds favor the decline in SPX being a corrective wave ii of (v) since the late August low.

[1] SPX rolled over before reaching the target zone of 1158-1164 discussed in That's All Folks! (9/24/10), leaving room for the current pullback being wave ii of (v) rather than the top.

The VIX may still be itching to deliver its final low.

[2] Two potential corrective structure has emerged in ES(Dec) futures (Chart 1). The blue count shows a DoubleThree [A]-[B]-flat[C] structure. The red count shows a single downward flat - slightly odd looking but much more bearish.

The market is short-term oversold - this statement does sound amusing given the larger picture - perhaps making the less bearish blue count more likely.

ES(Dec) is around the 0.382 pullback mark going into the close.

[3] The wave structure in the cash indices may show a single downward flat, which is more obvious in $COMPQ. (Chart 2 and Chart 3 )