IWM, bearish outlook
Dow
Sp, 4mth view
Transports
Summary
Wednesday - FOMC day no less, has made for a superb peak for wave'2. After Thursdays big drop, I remain very confident the peak of this cycle was indeed sp'1363, and we are now in the early days of what should be a very significant drop into the sp'1150/00 zone - as suggested by the monthly cycle charts.
One interesting aspect of today was the weakness in the Transports. Transports had a particularly weak day, and showed some good follow through after Thursdays drop. The tranny remains a VERY bearish index, and a key warning flag for the wider market.
From a MACD (blue bar histogram) cycle perspective, today was day'3 of this new down cycle. We could easily fall a further 5-7 trading days on the cycle before becoming oversold.
I'd guess we have a VERY good chance of breaking 1300 early next week, a fair chance of breaking 1266..and if so...then 1225 - a key monthly trend level, by next Friday. That is a very bold outlook I realise, and clearly, would be invalidated if we break 1363 at any time.
We shall see.