How will Thursday play out? If you only knew the hourly index cycle, and had a look at the MACD histogram, you'd surely say we're going up.
The bigger picture still looks promising, with some dramatic moves lower seemingly likely in the weeks ahead. However, bears are going to probably need a real catalyst to get a decline started. Where are all those black swans?
Look at that hourly MACD cycle, its ready to go positive tomorrow morning, there is a very viable 4-6 hours UP, easily - and that's just in the first wave. That could get us to 1355/65 by Friday, and then a few more positive days early next week.
Just a little reminder on something from last year...that ties in with my overall outlook...
July/August 2011 collapse wave
I realise many would argue over the count on the above chart, but I don't think that's the important issue here. What matters is to be reminded of the style of what was a very impressive 12 day decline.
Now, consider where we are..and one of the 'doomster' outlooks that I am looking for
We're clearly still holding within a large bear flag*, and its just a matter of when we break, not if. Downside should at least be to around 1225/00. I've seen a few people suggest 1250, but that just doesn't make sense to me for what should be a significantly stronger wave. I'm also well aware of some VERY key trendline support at the 1200 level - which goes back to the 2009 lows.
*Note how the current bear flag is almost twice as big as the bear flag/wave'2 of blue wave'1. So, wave'2 (black) in Sept/Nov time frame, maybe that'll be twice the size of the current flag, something around 10-14 weeks.
It does make me wonder,that if we somehow take a long time to get down into the 1100s, (when the Bernanke will likely appear), we could very much see a near mirror to 2011, with a big wave higher from late Autumn into Spring 2013.
Anyway, that's all for today....Goodnight !