Close Enough?

The chart has been updated with the price action while the price targets (blue ellipses) for yesterday (first shown a few days ago) are unchanged. We hit right between the two. I would have liked to see the high "in" the ellipse; but, as the Rolling Stones are fond of saying, ".. you can't always get what you want."

We did have a negative reversal in the RSI (RSI value higher on Friday's close than on the August 8 close while price was lower). The minimum target works out to 1388. This time the reversal is being confirmed by my second momentum indicator.

Finally, yesterday's price bar was day #2 in a Robert Miner "Snap Back Reversal" pattern. And so, I have to lean towards the view that the "C" wave rally from August 16 is complete. If this view is correct we should break the August 16 low without exceeding last Friday's high.

From the Sidelines; Waiting

Not much to add this morning as I sit and wait. I can say that the momentum indicators have still not confirmed the new low (below that of the August 3 closing low) .... but that doesn't mean much if we can't turn upwards.

For now I will also stick with my Elliott count; although if this current decline (from the August 8 high) is a "b" wave it shouldn't go much beyond 1380. I don't like to see Expanded Flat patterns where "b" is more than 161.8% of "a".

With the way the futures are this morning I am looking at 1362-1367 and 1350-1353 as areas of possible support.

More on Momentum Failures

As posted earlier on this blog, it was shown how the monthly S&P500 cash chart was displaying an RSI momentum failure.

Today I present a weekly view. Note the blue arrows. The arrow in the bottom pane of the chart is pointing to the recent highest price close. The arrow in the top pane shows the RSI on the same date at a new high for the move. New high in price, new high in the momentum (RSI). All is well for the bulls, right?

Perhaps not. The middle pane shows a second momentum indicator that was designed to show instances when the RSI failed to diverge at price highs or lows. Note how this indicator made a lower high.

Another reason I am "down" on equities right now.