The weekly chart remains on a technical “sell” signal as previously described, this week doing nothing to improve that situation. Notice that after poking up against the short term moving average on this chart (red line) we failed and then could not even hold the intermediate term average (blue line).
As posted in my blog on July 3 I was looking for an intermediate low in the cash S&P500 this fall with the final low most likely in May-Jun-Jul 2008 or perhaps late Dec 2008 or Jan-Feb 2009. I am sticking with that view and believe the current A-B-C pattern unfolding on the weekly chart (where wave “B” is the contracting triangle we’ve been following on the daily chart) will end in October as the intermediate low.
On June 29 I posted two price targets for the 2008 low. 1250 was one of them but this looks more likely to be the low of this October than the final low. Note that if we are to reach 1250 by October that the majority of the decline in the current A-B-C pattern is yet to come.
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