Thursday, September 22, 2011

Market Timing Update (9/22/11)

[EOD] Stocks -
Dow, transports and Russell 2000 made fresh lows, resulting in a visual five wave down from the nominal high (Chart 1), which is likely intermediate term bearish. The August low in SPX held today, but the proposed benchmark low was breached (Chart 2), which is likely intermediate term bearish. However, the relative strength of COMPQ and NDX is notable.

For the near term, the upside risks are
(1-green) The pending low is B-down, the market is setting up for wave C-up of an upward expanded wave 2-up.
(2) The pending low is [1]/[A]-down from the nominal high, the market is setting up for [2]/[B]-up.
(3-blue) The pending low completes a five-wave decline from the early July high, thus completing a larger corrective structure from the Feb peak.

[130pm] Count update -
Notable developments are key pivot breaches and substantial divergence among indexes.

At the moment, the Aug 22nd low (the proposed benchmark low / warning) was breached in INDU, MID and RUT but not yet in SPX. TRAN and NYSE broke further to new lows. COMPQ and NDX are visibly stronger on a relative bases.

This chart shows updated tracking counts for SPX.

[1230pm] DAX update -
Low held at the close. see 2nd chart below.
[950am] Transports update -
$TRAN broke to new low, $RUT not too far behind. [update] NYSE composite broke to new low.

[710am] Gold, Bond, Dollar update -
[705am] ES, DAX update -