Friday, August 31, 2012

MTU Weekend Ed. - Hope Rally Update (8/31/12)

A potential near term consolidation as discussed in Reaction (8/24/12) has continued over the past week.

It appears that the stage is being set for the market to reach the black point number 5 once the current consolidation is over, based on our Hope Rally model (Chart 1). As discussed in past weekly editions, a potential timing of the black point number 5 is likely early October.

Interestingly, the SP500 A/D tally is now showing a potential bullish triangle (Chart 2, green lines). If so, the red line marks a key pivot for the SP500 A/D line.

Chart 3 presents the top tracking counts for the very near term.
green - bullish LD in progress following an ABC decline
blue - bullish terminal triangle
red - bearish "flat" or "triangle"