Monday, October 26, 2009

Count Invalidated

The bearish count that I presented Friday for the Qs has been invalidated. As long as the 10/21 high is not exceeded, the correction may still be considered to be underway. Unfortunately however, as I have stated on several occasions, we are likely going to see a very choppy and difficult correction. Smaller position sizes and wider stops will be the winning approach.

If we do see new highs today or tomorrow, the next potential turn date is November 3rd by my approach. With a window of +/- 2 days, this puts a possible top at 10/30 to 11/5. But let's not put the cart before the horse, we haven't seen new highs yet.

Another clue that I will be watching to confirm that the correction is truly underway is AAPL falling and sustaining below 200.


dave said...

I think we have been in a correction since mid-Oct, not the correction THAT we wanted, but a high level sideways correction. This is confirmed for me by the TRIN 5dma figures.

We have gotten very oversold w/o really going anywhere. And in today's intraday drop which i expected because of the time of the month when we dropped we got to a high TRIN figure again very fast. That indicates that everyone has been overanxious to try to sell the mkt dowm.

This could turn out to be bears hearing the proverbial train whistle around your cycle date.

If these down days were occurring on lower TRIN figures i might feel differently.

dave said...

It was my plan to re-short IWM during the first 3 days of this week, which i suspected of being a bullish end-of-month period.

Also, it had the look of another upward ending abc. However, it seemed to leave a tad too much time left for devilish bulls during Tues & Weds.

Wouldn't be surprised at all to see DJI & SPX bounce strongly tomorrow in a c of 2.

Dollar still hasn't done anything conclusive yet. Not saying it won't, but it has won skirmishes before only to trend to NL's.

dave said...

Two small corrections to what i wrote:

1) "And in today's intraday drop which i expected because of the time of the month..." I meant i could see an intraday c wave rally in this time period that would lead to a "collapse".

2)"Dollar still hasn't done anything conclusive yet." It did close >20E, but it's done that countless times since June. However, it did have a MACD buy signal. I'm from Missouri (the Show Me State). Whether i'm in KC or StL, i can cross state lines quickly.