Friday 16 November 2012

Multi-month decline underway

Since the Bernanke infamously announced QE3 on Sept'13'th, we've seen the market decline. November has confirmed those initial signs of weakness we saw in October. Yet, so far we've not seen any real sign of market panic, never mind an end-wave capitulation day.


sp'weekly2



sp'monthly3b


Summary

The weekly cycle target of sp'1345 was almost hit today. It has certainly been good to see the broad outlook pan out (so far) as expected.

Regarding the (black 1-5) count on the monthly chart, don't get too fixated on the precise levels as such, but more the broader type of wave, and the time frame. Right now, I'd look for a general low to be put in around Feb/March. I have the suspicion that the Bernanke will be increasing monthly purchase amounts at that time, when the mainstream come to accept the US is in recession. Of course, such increased QE will likely cause at least a short term (2-4 month) ramp in the broader market.

As for Friday, well, I can't work out whether we've seen the near term floor. I'm seeking at least a little bounce of sp' 10/15pts, before a re-short. I think there is potential for one further major decline before the thanksgiving holiday period. See my earlier update on the hourly and daily cycles for details.

Goodnight from London

ps. is it time to 'buy the dip' yet?   ;)