Saturday, November 17, 2012

Charts 11-16: Capitulation day?

I've got us in the midst of a wave 3 down that has not extended its wave 1 by the wanted 1.618x magnitude, for which the target was SPX 1334.  I'd like to see that Monday, with one last burst of consistent selling.  The McClellan has already put in a low, so if it can hold steady while SPX takes a dive, it will show a divergence that will help us mark an IT bottom here.

But any bounce from here should only target the 1361 area, before rolling over again into a 61 pt wave 5 that will take us to 1300 or so.  That would set up a 100pt rally into EOY.

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