Market Turning Points | Andre Gratian | 2011-09-11

From Safehaven.com:

Last week, the SPX squandered an opportunity to extend its uptrend. Although it has not yet violated its series of higher lows since 1101 on 8/09, and has a good chance of starting next week with positive action, the odds are stacked in favor of the resumption of its long-term downtrend.

With the 3-yr cycle scheduled to make its low in early October, equity indices are facing an adverse cyclical configuration and, among other negatives, last week the dollar appears to have broken out of an intermediate downtrend. Also, TLT and the VIX are in solid long-term uptrends which may be ready to be extended.

The structure is playing out as a likely wave V for the downtrend which started at 1370. There was a question as to whether wave V had made a truncated low at 1121 but, with the recent market action, it makes more sense to place wave IV at the SPX 1230 high on 8/31, with wave V currently underway. There will be a good rally after the completion of wave V, but not before the index has made a new low — perhaps in the vicinity of 1065 (preliminary target).

On Friday, SPX probably ended its decline from 1204 and is now ready to start a near-term bounce or, it could end on Monday instead. Either way, as we will see on the hourly chart, the short-term indicators appear ready to reverse. Should the bounce develop exceptional strength, the structural analysis would probably have to be revised.

Continued

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One Response to “Market Turning Points | Andre Gratian | 2011-09-11”

  1. you should post more often great read, also like the theme of the site. I have my own poker blog nothing special.

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