The Qs reversed from resistance at the median line of the advance from the July low on clearly falling volume and with a bearish hook in the MACD. It is beginning to look as if this is an x wave with wave y of a double zz yet to come which should take the Qs down to 40+/-. If this is the case, then wave B of X is underway now. The conclusion of wave y may only be the first leg of a more complex correction that should extend into the late November to early December time frame.
If wave B is not yet underway, a higher rally high may be expected by the end of October, but the pattern in the transports does not support that view. It may be worth considering buying protection at this level, or reducing net long exposure, or initiating partial index short positions or a combination of the above. We are entering the time window of potential turn dates. There are a number of turn dates coming up, so wild swings may in the cards. Only a solid advance (1.7% or more) on rising volume would alter this potential.
3 comments:
Craig,
Are you aware that TL flip-flopped twice in one day, Thurs ?
Early Thurs morning he posted the following update: ": I believe it is possible that "Wrong T#4" is a "Real T" & although the upside momentum should peak Oct 12-14, another peak near the end of Oct via this T is likely. You should calculate this Ts end date same way as the Mystery T with center post at C instead of B. Best sell strategy is to look @ upper S&P channel for top criteria. It will be S&P cash 1100 or better."
Later Thurs evening he posted this update: "Oct 8 note: I am changing my outlook back to the original forecast of an important peak and selling point on Oct 12 13 14 as below. The performance on Thursday was negative in my view as we are losing momentum and the volume oscillator is probably topping at the zero line. Details on next Sunday's regular Update."
The mid-Oct peak was first mentioned as long ago as July 26. Nothing that happened Thurs mkt-wise should have changed his forecast once let alone twice in ONE day. Calls into question validity of T-Theory. I totally understand that there are mkt factors, but these are not supposed to be part of T-Theory.
Yes, but this is why I have come to view price itself as the ultimate arbiter of market direction. All of the other market information is valuable, but without confirmation, it can often mislead us.
Many traders spend all of their time worrying about the tertiary data, which leads to bad decisions.
I think TL got off track when he started worrying about the "wrong" Ts. The value of his work is recognizing the advance/decline cash buildup and dissipation cycles. The error is to use that for exact timing.
Hiw work is probably the best way that I have seen to represent the classic accumulation, mark-up, distribution, mark-down cycle that will always be a part of the market phenomenon.
"I think TL got off track when he started worrying about the "wrong" Ts."
I agree. By flip flopping twice in one day, now he could justify anything - ditto with the "wrong" Ts.
Again, i understand how changing info changes opinion, but that shouldn't affect a months old T Theory forecast twice in one day.
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