Thursday, September 2, 2010

Market Timing Update (9/2/10 Close)

[4PM Stocks, VIX] The stock market is ready for atpull-back (at least a temporary one.)

The market has delivered an impressive impulse wave advance from the Aug 31st low. Per squiggle counts, any nearby top is either the end of the 3rd wave of this impulse or the end of the impulse itself.

The following charts (Chart 1 and Chart 2) highlight the two squiggle counts for the SP500 cash index and the SP500 Sept. e-mini.

Chart 3
offers the larger picture wave counts -
The more permanent risks facing the bulls are
Technical indicators show a near term overbought market.
If the larger structure is indeed a triangle (green labels), it's final wave E which is supposed to be a three, is about done.

There is likely additional upside potential for the rest of the counts, but a pull back in the meantime is quite likely.

And finally, here's a potential count on the VIX (Chart 4), assuming the prior low holds!