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Friday, September 4, 2009

Black Tuesday

I previously counted Friday's advance as minuette wave 4. It traveled about ten points further than I expected which lead me to study other markets. I now believe Fridays move was minute wave 2 .

The chart above is the $INDU. Unlike the SPX, the first few waves off the top reveal five waves of minuette wave i. We should see a very large sell off on Tuesday as minute wave iii unfolds.

Fridays advance retraced 50% of minute wave i. The R1 Pivot Point will be at 1020 on Tuesday. If the market does not gap down at the open we may climb to the .618% level where I expect the Bears will take control. R1 and the 61.8% levels are nearly the same.

There is not a lot of resistance above except for the M60 and the Weekly Kumos, and the M60 looks vulnerable.

We are on the cusp of a major battle between the Bulls and Bears. The Bulls have very little time to take advantage of the weak area of the Weekly Kumo, and may have already lost their chance to climb above it. The top flattens out at 1053, and this will require a lot of market strength to push beyond. From an Elliott Wave stand point we would have to look at a very bullish scenario like the one presented by Daneric.

Bottom line is the Bears need to break 990. The Bulls need to break 1053. I'm in favor of the Bears.

Analysis presented on this Blog has only informational, and educational purpose, and does not represent a proposal for buying or selling currency contracts.

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