Waiting for a blue...or red candle

Whilst the tranny was the first index to flash a red flag warning for this Autumn, the other main indexes are still outright bullish. The Sp'500 for instance is now sporting the third consecutive green candle on the Elder Impulse system.


sp' monthly, rainbow

sp' monthly3b

sp'monthly3c

Summary

First, a brief reminder on the transports, which did indeed provide the first red flag of the year...

The 'old leader' starts October with the third red candle, first downside target remains the 4500 zone.
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Key targets for the bears

Bears desperately need a monthly close back under the 10MA on the monthly. Right now, that is 1382, some 62pts lower, although that's only 4.5%. Its not exactly asking for a collapse, is it?

So, we have a long month ahead. The US election is a mere 5 weeks away, the 'fiscal cliff' is looming, and Europe is imploding. But hey, what else is new?


What about Tuesday?

The VIX daily cycle certainly offers upside to 18/19, but the bears need a daily index close <sp'1440. Until then, the bear flag apparent on the daily index cycle looks likely to just add another day.

I remain short, seeking an exit somewhere around sp'1420/00, later this week.

Goodnight from London