Monday, December 10, 2012

Equities Sellers; Your Time is Now.

That's right , this is where the indexes, esp. the INDU are most vulnerable. After a really decent bounce, nearly a Fibonacci .618 retrace, the hourly relative strength is showing negative divergence and we are fast approaching the end of the year for those needing to lock in.  If selling is going to show up this is a really likely point in time and price.
Adding to the risk here is the overall picture of a potentially completed corrective structure up from the 2009 lows, followed by an initial wave 1 down,  and now 2.   And so, a wave 3 down is possible from right around here.
Hourly
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Weekly
click to enlarge
A 3rd wave down, of course is usually characterized by multiple accelerating sub waves that eventually 
carry it to a Fibonacci multiple of the 1st wave...1.618 or even 2.618 .
A 3rd wave would = 2.618 of 1 around 10000 in this case.



Shorter term; 
taking out the 1300 level ought to raise the red flags.


Of course as pointed out in previous posts this COULD just creep up in a choppy slow painfull reiteration the wedging action seen in W and Y waves to double top next year. 
Our future should be revealed soon.

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