Tuesday, October 26, 2010

No Confirmation Yet

Markets gapped down at the open this morning and the Qs came under the first critical level of 51.55, but have since rebounded in what appears to be a very impulsive move. It could be a sharp 2nd wave pullback, but the odds are that the Qs have begun the next wave up in an ending diagonal triangle. Rising above 52.12 will confirm this view.

Until we see a true confirmation by breaking of the critical levels and a larger degree impulsive decline, we must assume the rally will continue, although the number of divergences is building which may lead to a more dramatic decline when the market does turn.

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