Sunday, October 20, 2013

10/20/13: Looking for down wave to commence this week

Based on how the futures opened up Sunday evening, it seems like the markets want to pop in the morning.  I'll look to add to shorts if that is the case.

Looking back on how I had forecasted, I did forecast a new all time high but revised it later.  Maybe it's a lesson that I ought to stick to my guns a bit more.

Timing window wise, markets blew past a couple of the ones I was looking at.  Usually if markets hit a high at the timing window then it takes a break into the next timing window, but in this case, the 16th and the 18th both ended up being highs.  This tells me that the next down wave is at minimum 1720 (or around 77 on UPRO) by the 25th.  We'll see how realistic this is.

There are numerous negative divergences floating around at the weekly, daily, and hourly level.  There are too many to's kind of pointless to list them all.  At the same time, if this wave decomposes into 3 waves where A=C, then we tomorrow's pop will be as close as it gets to A=C.

The daily negative divergences are a bit egregious.  Looking at the TSI, we've made about 4 negative divergences in a row.  We no longer have a positive reversal setup on each low this past year, TSI set up a positive reversal meaning a lower low on the TSI but a higher low on price.  This generally leads to higher high.

In the most recent one that transpired, TSI did not make a lower low.  At the same time, there is a large NYMO negative divergence.  This seems to indicate to me that the next trip down will break our support line and head to 1600 (which is approx the 200MA - I use 233 as a fib avg).  Then I think, a bounce up from 1600 to back test broken resistance...maybe in the 1700s area before another sizeable move down into the low 1500s.

Given I believe we are in a 3-leg upwards B wave that decomposes into A=C, then I am expecting a down wave to commence starting this week and into the end of October.  I am expecting November to open weak but bounce up into Thanksgiving, then December weak(?)

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