Wednesday, June 8, 2011

Comments and outlook for 06-09-2010

Today held up a little better than I expected.  Still we broke the 1278 level I mentioned.  So much as expected, but a little less downside than expected.  The longer cycles (1 year hard down, 20 week down and 22TD down) seem to still be in control.

So what about tomorrow?  The 11.2TD cycle tops by afternoon, but the 5.6TD cycle and 2.8TD cycle are bottoming.  Overall it seems the shorter cycles should contribute to the downside bias for most of the day.  These cycles should top and bottom and top by 2-3 pm. 

So this is how I imagine the market behaves tomorrow.  Weak open (maybe gap down) and down to around 2:30.  With the longer cycles down and 2 shorter cycles down hard into a bottom we could get a sizable sell down before these cycles bottom.  Then the last 1-1.5 hours the market recovers some lost ground.  FWIW: this may be a tradable bottom (I'm talking 1-2 days - not a long term trade!!!).

Here is a visual:

GL traders.  Tomorrow afternoon the bear may decide to take a 1-2 day nap so be careful - this bear could awaken at any time.  Hehehe.  Do your own analysis

Update 11:18

My charts seem to be off by about 4 hours (second time this week I have had this thought).  So I shifted then a bit.  I believe this is a better representation:

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