Thursday, October 21, 2010

Market Timing Update (10/21/10 Close)

[4pm stocks and USD] The [205pm] update remains applicable - and there's no confirmation of the top today (the red count). The rebound into the close is a rather deep retrace of the second leg of the prior decline and appears to be a nearly completed five. Thus, odds favor additional (toppy) upside (the pink and blue counts).

The following charts offer an update. Given the appearance of numerous consecutive threes over the past month, I find the notion of an expanding ED most attractive (the pink count). The third chart shows how an expanding ED would look like on the daily time frame.

Again, the USD index had better deliver an LD or face the risk presented by the bearish count.

[205pm stocks] Need to decline below the Oct 19th low to offer confirmation of a minor 2 (bearish) top or a minor 3 (bullish) top, ideally before the cash market closes, to price out the nocturnal crowd.